June 23, 2015
Nationwide Report Indicates Sustainable Expansion in The Housing Market Over The Near Term
Little chance of a housing downturn over the next year due to strong employment, improved household formations, and a healthy mortgage market
Columbus, Ohio - Most U.S. housing markets are healthy with little chance of a downturn in the near term, indicates the latest quarterly housing market barometer released today by Nationwide, a leading insurance and financial services organization. The forward-looking Health of Housing Markets Report (The HoHM Report) evaluates the housing health outlook for the U.S. and 400 metropolitan areas and includes a national leading indicator score as well as regional readings and breakdowns.
This quarter’s leading indicator score is a very positive 109.4, a slight decrease from last quarter’s record level of 109.8. An index value over 100 suggests the national housing market is healthy, with lower chances of a housing downturn over the next year. The employment, household formation, mortgage market, and house price components of the national index remained positive with the latest available data. Also, with national housing affordability neither undervalued nor overvalued, there is no sign of a national house price bubble.
In addition, the report indicates that:
- Regionally, the index performance rankings show that the housing markets in the vast majority of metropolitan statistical areas (MSAs) are healthy. This suggests that expansion in most local housing markets is sustainable in the near term.
- The healthiest major housing markets in the nation are in Cincinnati, Cleveland and Chicago.
- Eight MSAs across the country are in slightly negative territory, including Bismarck, New Orleans and Dallas.
- Seventy-five percent of the negatively ranked MSAs in the country are in either Louisiana or Texas, with a number of neutral-ranked metro areas in those states as well.
“On the positive side, many metro areas are seeing strong and sustainable job growth along with a pickup in household formations, which is reflected in their healthy housing markets,” said David Berson, Nationwide’s senior vice president and chief economist. “In several of the negative markets, strong house price gains are outpacing income growth or job growth has slowed substantially.”
“A number of Louisiana housing markets have been impacted by job losses due to rising oil prices,” Berson continued. “In Texas, however, the issue is overheated housing markets making housing less affordable, as economic diversification has made the impact of lower oil prices on job growth less of an issue.”
The Top 10 MSAs in the index are, in order: Williamsport, Pa.; Springfield, Ohio; Jonesboro, Ark.; Sebastian-Vero Beach, Fla.; Little Rock-Conway, Ark.; Dayton, Ohio; Cincinnati, Ohio-Ky.; Danville, Ill.; Fort Smith, Ark.-Okla.; Greensboro-High Point, N.C.
The Bottom 10 MSAs, in order, are: Hammond, La.; Bismarck, N.D.; Victoria, Texas; New Orleans-Metairie, La.; Lafayette, La.; Weirton-Steubenville, W. Va.-Ohio; Dallas-Plano-Irving, Texas; Houma-Thibodaux, La.; Gainesville, Ga.; Watertown-Fort Drum, N.Y.
Showing the most improvement in the past year were, in order: Danville, Ill.; Grand Island, Neb.; Erie, Pa.; Flint, Mich.; Brownsville-Harlingen, Texas; Waco, Texas; Elizabethtown-Fort Knox, Ky.; Yuba City, Calif.; Brunswick, Ga.; Lake County-Kenosha County, Ill.-Wis.
Weakening the most in the past year, in order, were: Lafayette, La.; Myrtle Beach-Conway, S.C.-N.C.; Spartanburg, S.C.; Bismarck, N.D.; Alexandria, La.; Racine, Wis.; Rapid City, S.D.; Lafayette-West Lafayette, Ind.; Lewiston, Idaho-Wash.; South Bend-Mishawaka, Ind.-Mich.
More information about the HoHM Report, including the methodology used, can be found at www.inthenation.com/housing. The HoHM Report will be released on a quarterly basis online and in print.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides a full range of insurance and financial services, including auto, commercial, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; banking and mortgages; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com.