MGIC: Realty Markets Strong
Mortgage Guaranty Insurance Corp.'s national Market Trends Index did not change between the third and fourth quarters of 2003, remaining at 6.58.
The index is a barometer of single-family real estate market conditions, with 1.00 being a weak market with no signs of improvement and 10.00 a strong market with no signs of deterioration.
If the index is between 6.00 and 8.00, the market is considered stable.
In creating the index, MGIC's credit policy department looks at three-month market data from 73 Metropolitan Statistical Areas.
The fourth-quarter number continues a downward slide for the index. The MTI for the fourth quarter of 2002 was 6.70 and for the year before it was 6.92.
San Jose, Calif., is the only market currently rated weak. There are eight markets listed as soft: Austin, Texas; Buffalo, N.Y.; Detroit; Indianapolis; Rochester, N.Y.; San Francisco; Salt Lake City; and Tulsa, Okla.
At the other end of the spectrum, there are six strong markets, three of which are located in Southern California: Orange County, Riverside-San Bernardino and San Diego. A pair of markets are located in central Florida: Orlando and Tampa. The final strong market is the nation's capital, Washington. The remaining 58 markets are rated as stable.
Neil Siegel, MGIC senior market analyst, said, "The national economy started to show some improvement, as demonstrated in real GDP [gross domestic product] - improved income trends and business investment. However, the housing sector has not yet reflected these changes.
"Overall, the national housing market is still considered stable. With home price appreciation slowing vs. a year ago, existing home sales recorded a double-digit gain.
"This helped keep the supply of existing homes low - in the range of four to five months."
By region, the best is the South at an index of 6.85, down from 7.11 one year before. The West is now second best, at 6.76, down from 6.82. The Midwest slipped to third, at 6.25 vs. 6.88 one year ago. The Northeast remains the poorest performing region at 6.15, down from 6.62. "Many economists still predict home sales to slow in 2004. Most of this is due to a projected rise in mortgage interest rates. But, the improved economic conditions may be enough to offset this trend," Mr. Siegel said.
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