Low interest rates are keeping the housing market strong even as affordability keeps declining, according to the latest Freddie Mac Multi-Indicator Market Index.
July's index is 85.1, a gain of 0.14%
When compared with June, the purchase component gained 0.45% to 77.8, but the payment-to-income index declined 1.72% to 67.3.
"Despite rising house prices, the majority of housing markets have sustained their momentum due in large part to low mortgage rates. For example, purchase applications, as measured by MiMi, were up more than 17% year-over-year in July and remaining at their highest level since December 2007," said Len Kiefer, Freddie Mac deputy chief economist, in a press release.
The states with the most improvement in their index values from June were Illinois (1.72%) and Nevada (1.36%). These states had nowhere to go but up as Illinois has the 48th (including the District of Columbia) lowest index at 77 while Nevada has the lowest at 67.3. Florida had the largest year-over-year increase in its index at 10.03%.
