The Middle Tennessee housing market continues to heat up nicely — to the point where the year-over-year improvement in Freddie Mac's Multi-Indicator Market Index has reached double digits for the first time since June of last year. As in recent months, the biggest driver of those gains is an improvement in the payment-to-income ratios of local borrowers.
Here's Freddie Mac's national news release.
The Middle Tennessee economy grew at a 3.6 percent clip last year, up from 3.1 percent in 2013 and good enough for 53rd among the country’s 381 metropolitan areas.
The 3.6 percent number was almost double the overall growth of U.S. metropolitan areas and lifted Nashville’s GDP to $98.5 billion in 2009 dollars. Since 2009, the area’s economy has grown from $81.5 billion.
Four different sectors — trade, finance/insurance/real estate, business services and education/health care — contributed at least half a percentage point to the region’s growth last year. That helped Middle Tennessee comfortably outpace the state’s other major metro areas. Knoxville’s GDP grew 1.0 percent last year and Memphis’ 0.4 percent while Chattanooga’s economy shrank by 0.9 percent and Clarksville’s contracted by 1.2 percent.
Check out all the 2014 BEA metropolitan data here.
Slowdowns in the growth of Middle Tennessee's largest job grouping as well as in the important manufacturing sector pushed year-over-year employment growth below 3 percent in August, according to Bureau of Labor Statistics data. The professional and business services sector, which accounts for 15 percent of all Nashville-area jobs, grew by just 1.8 percent in August — its smallest number since June of last year. Meanwhile, job growth in the area's auto-heavy manufacturing industry slowed to 2.4 percent while the information and finance sectors went a little deeper into the red year over year. Offsetting some of those negative developments were strong months from the big leisure and education/health sectors.
Almots 12,800 Nashville-area homes with a mortgage were in negative equity at the end of June, meaning they were worth less than the debt still owed to the lender. That amounted to 3.6 percent of all mortgaged properties, which was down more than half a point from the end of March and 1.2 points below the year-prior number. The number of properties near negative-equity levels was 1.1 percent on June 30, versus 1.4 percent at the end of the first quarter and 2.0 percent in mid-2014.
After a few subpar spring months, Nashville's job growth has been powering through the summer. June and July's growth of 3.7 and 3.6 percent was the strongest two-month since last August and September and was driven primarily by hiring surges in the important retail and leisure/hospitality sectors. And for the sixth time in nine months, area construction companies employed at least 10 percent more people than they did a year ago.
Nashville-area homeowners continued to improve their financial standing in June: The 90-day delinquency rate among mortgage borrowers ticked down to 2.35 percent, half a point below where it was at the end of 2014. Here's how the delinquency and foreclosure rates have fared so far this year. And here's CoreLogic's national report.
There seems to be no stopping the Nashville-area housing market these days. The latest Freddie Mac Multi-Indicator Market Index shows a local housing economy rising for the fifth straight month to 90.0. It was under 79 in January and is now up 58 percent from its fall 2010 trough. Freddie Mac says Middle Tennessee is now the eighth-strongest housing market in the United States. (The company's national news release is here.)
In what should be an encouraging sign for many other local businesses, Freddie Mac researchers say the biggest gains are coming thanks to better payment-to-income ratios. Given how steadily home prices are rising, that statistic might suggest local workers' compensation is more than keeping up.
The health of Middle Tennessee's housing market continues to improve, according to research firm CoreLogic. At the end of May, just 0.38 percent of all homeowners were in foreclosure — compared to 0.56 percent statewide and 1.29 percent nationally — while the 90-day mortgage delinquency rate has dropped more than 40 basis points since the end of 2014.
The Middle Tennessee housing market continues to grow healthier, according to the Freddie Mac Multi-Indicator Market Index, which tracks transaction data as well as residents' incomes, mortgage applications and overall job growth. The measure ended May up more than 8 percent year over year, its fastest growth pace since last August and almost three points higher than in March. Nashville's MiMi reading is at its highest since January 2008.
Breaking down the latest MiMi reading — you can check it out here — the recent surge is mainly due to a big improvement in Nashville's job market. Mortgage applications and credit quality have been in good shape for a while, which leaves the index's payment-to-income ratio component as the only laggard. But it, too, is improving and has climbed four points to almost 73 in the past three months.
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