There are many different ways to measure the health of a recovering real estate market. Mortgage giant Freddie Mac uses something called a “Multi-Indicator Market Index,” also known as a MIMI. This index looks at four different factors to assess the health of the real estate market in any given area: applications for home purchases, employment in the area, the affordability of real estate and the level of mortgage delinquencies.
The MIMI ranks different areas throughout the country on a scale that goes up to 100, a perfect score. August was the most recent month that the MIMI was released for the South Florida area, according to a recent report. In that month, the South Florida real estate market scored 69.2.
So, what does this score mean for the health of the real estate market in South Florida? Well, according to the report, any score lower than 80 on the MIMI shows a weakness in the market. Many of our readers may be asking why the South Florida area scored so low when it is quite obvious that the local market is rebounding nicely – much more so than many other markets. It appears that the answer lies in one particular factor in the MIMI for this area: mortgage delinquencies.
Despite the robust pace of the recovery in the local market in the years after the real estate “bubble” burst, the report indicates that the level of mortgage delinquencies in South Florida is still relatively high. However, the good news is that the rate is decreasing rapidly. Just consider this: the August MIMI score of 69.2 for South Florida was a whopping 11.43 percent higher than the score from August of 2013 – something that borrowers and lenders alike can appreciate.
Source: Sun Sentinel, “Housing market improving in South Florida, Freddie Mac says,” Paul Owers, Oct. 24, 2014