The Freddie Mac Multi-Indicator Market Index for August was up 5.4% over the same month last year, driven by its purchase component, which had an 18.6% increase.

August's Multi-Indicator Market Index was 85.7, its highest level since August 2008. This was a 1.05% increase over July. The index has continually increased on a month-to-month basis since December 2011, except for October 2013 and January 2015.

"Housing markets are on track for their best year in a decade, and that's reflected in MiMi. The MiMi purchase applications indicator is at its highest level since December 2007," said Len Kiefer, Freddie Mac deputy chief economist, in a press release.

The purchase application component is at 79.4, with payment-to-income at 66.6, current on mortgage at 89.8 and employment at 106.8.

The most improved state, when compared with August 2015 index, was Florida, up 12.13%. The state also had the second best month-to-month improvement at 2.14%, behind Nevada's 2.95%.

"MiMi's purchase applications indicator is up more than 30% in Florida compared to last year. Meanwhile, in the West, the battle between low mortgage rates and rising house prices continues. So far, low mortgage rates have helped on the affordability front, but in hot markets like Denver; Fresno, Calif.; Provo, Utah; and Los Angeles, it's becoming increasingly difficult for the typical family to afford a median-price home," Kiefer said.

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