Mortgage Guaranty Insurance Corp. on Tuesday reported that its national Market Trends Index–which measures price and sales movement in single-family housing markets–improved to 6.7 in the third quarter after being flat at 6.66 for the last two quarters.

“The U.S. economy grew at a steady rate as annual employment rose 1 percent, its strongest gain since 2001,” said Neil Siegel, MGIC’s senior market analyst. “However, cutbacks in the airline and auto industries, moderately higher interest rates, and rising energy costs could dampen the rate of economic growth.”

MGIC’s MTI is based on the Market Trend Analysis Report produced quarterly by MGIC’s Credit Policy Department using lagging three-month market data from 73 Metropolitan Statistical Areas (MSAs). The index is a barometer of single-family real estate market conditions with readings ranging from 1 to 10. A reading of 1 indicates a weak market showing no signs of improvement; a reading of 10, a strong market with no signs of deterioration. A reading of 6 to 8 indicates a stable market.

Siegel notes that 11 of the 73 markets tracked by MGIC are currently experiencing “soft” or “weak” single-family housing market conditions.

“Another increase in interest rates by the Federal Reserve Board had little impact on the housing market as both home prices and existing-home sales recorded strong gains,” Siegel said. “With this said, we still expect home appreciation to slow to traditional levels.”

Of the 54 markets currently rated as “stable” in MGIC’s Market Trend Analysis, 15 have a short-term projection of “softening” and four have a short-term projection of “improving.”

Austin, Texas; Buffalo, N.Y.; Denver, Colo.; Detroit, Mich.; Indianapolis, Ind.; Rochester, N.Y.; Portland, Ore.; San Francisco, Calif.; San Jose, Calif.; Salt Lake City, Utah; and Tulsa, Okla., are currently “soft.” On the other end of the spectrum, Orange County, Calif.; Riverside-San Bernardino, Calif.; San Diego, Calif.; Orlando, Fla.; Tampa, Fla.; West Palm Beach, Fla.; Honolulu, Hawaii; and Washington, D.C., are currently “strong,” according to MGIC’s Market Trend Analysis.

“The Southern and Western regions of the country continued to lead the housing sector, accounting for almost all of the ‘strong’ markets,” notes Siegel.

MGIC is a provider of private mortgage insurance coverage.


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