Despite the historically busy springtime selling season, the housing market just can’t seem to get out of its own way.
The latest example of that comes from the Freddie Mac Multi-Indicator Market Index. The MiMi is showing a national housing market that Freddie Mac describes as "weak" and "flat" compared with one month ago, and especially so compared with the housing sector one year ago.
The report comes at a time the nation’s leading economic policymakers are clearly worried about the soft real estate market.
Here’s what Federal Reserve Chairwoman Janet L. Yellen, said before a Senate committee May 8:
"With the harsh winter behind us, many recent indicators suggest that a rebound in spending and production is already under way, putting the overall economy on track for solid growth in the current quarter. One cautionary note, though, is that readings on housing activity — a sector that has been recovering since 2011 — have remained disappointing so far this year and will bear watching."
Reinforcing Yellen’s point is one statistic from the MiMi file: Only 10 of 50 U.S. states are in a "stable" housing market range, with North Dakota, Wyoming, the District of Columbia, Alaska and Louisiana ranking in the top five, according to Freddie Mac.
And only four cities out of 50 measured in the Mimi report — San Antonio, New Orleans, Austin and Houston are also considered stable by Fannie Mae.
According to Frank Nothaft, chief economist at Freddie Mac, the housing market appears to be taking a big step backward.
"Less than half of the housing markets MiMi covers are showing an improving trend, whereas at this same time last year more than 90% of these same markets were headed in the right direction. We’re hopeful that many of these markets that have stalled will start moving again now that mortgage rates have eased over the past month and the spring home-buying season is upon us."
Nothaft notes also that recent home price gains aren’t as helpful to the market as one might think.
"House price gains are a double-edged sword at this stage of the recovery," he adds. "They help those hard-hit markets where prices are still low and many homeowners are underwater, but in areas where supply is constrained, they’re creating an imbalance and pricing out many first-time homebuyers."
This article was republished with permission from TheStreet.