Each month, Freddie Mac updates its Multi-Indicator Market Index (MiMi), which measures how close a market is in relation to its long-term normal range, and the most recent update added two markets to its "in range" category: Knoxville, TN, and Charlotte.
MiMi is a fairly complex index, but here's how Freddie Mac describes it:
MiMi measures the stability of local housing activity by combining current local market data with Freddie Mac data for all 50 states plus the District of Columbia, the top 100 metros, and the nation.
Specifically, MiMi assesses where each market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of current mortgage payments in each market, and the local employment picture.
The four indicators are combined to create a composite MiMi value for each market. The indicators themselves act as weights on a scale that measure shifts in a particular market. When the indicators are in balance – what MiMi refers to as “In Range” - the market is considered stable and within its long-term normal range. When the indicators move outside of their long-term stable range, the market is considered either weak or elevated.
Here's the skinny on Charlotte:
Purchase applications in Charlotte are up 5% in the past month and 14% in the past quarter. This was the primary driver of Charlotte's move into the "in range" category. Here are some historical numbers:
The bottom in Charlotte was September 2011, when the MiMi hit 46.4%. Since that time, it has rebounded about 73% to its current level of 80.1.
The major takeaway from this news is that Charlotte metro is a healthy market, not too hot & not too cold. Everyone likes a hot market, but remember, what goes up must come down, and hot markets can be tough for buyers to navigate, as they often run into skyrocketing prices and very low inventory.
Right now in Charlotte, we do have low inventory, but demand has stayed relatively in line with supply so that we don't have any sort of crisis of low inventory or abnormally large jumps in value.