September 22, 2015
Nationwide Report Shows Healthy U.S. Housing Market, Majority of Top Metro Areas to See Sustainable Expansion
But affordability is a growing concern in Colorado, Texas and on the Coasts, along with job losses in energy-producing states
Columbus, OH - Most U.S. housing markets are healthy with little chance of a downturn in the near term, according to 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 for the U.S. and 400 metropolitan areas.
While affordability is fairly valued in much of the country, in 23 percent of MSAs affordability is lower than the long-term average. Relative affordability is approaching, or has gone beyond, unhealthy levels in the Pacific Coast, Colorado, Texas and pockets in the East.
The report also indicates that:
- A number of markets are weakening due to the impact of lower oil prices on employment, which is reflected in the entire bottom 10 MSAs being in Texas, Louisiana, Wyoming and West Virginia.
- While a few MSAs in Texas are among the bottom 10, the recent drop in oil prices has not slowed the housing markets in the larger cities, yet. The housing markets in Dallas, Austin, Houston and San Antonio continue to run very hot.
- The most sustainable major housing markets in the nation are Buffalo, Louisville, Oklahoma City and Detroit.
“On a national level, housing affordability is fairly valued, with little sign of a housing price bubble,” said David Berson, Nationwide’s senior vice president and chief economist. “However, certain areas are seeing price appreciation that is too rapid compared with income growth, potentially driving homebuyers out of the market. These markets are mainly concentrated in the Pacific Coast, Colorado, Texas and parts of the Eastern Seaboard.”
“Alternatively, markets with strong ties to the energy sector, such as Wyoming and Louisiana, are seeing weakening housing markets,” Berson continued. “This is, in part, due to job losses caused by lower oil prices.”
The Top 10 MSAs in the index are, in order: Kankakee, Ill.; Harrisburg-Carlisle, Pa.; Dayton, Ohio; Yakima, Wash.; Lansing-East Lansing, Mich.; Buffalo-Niagara Falls, N.Y.; Lancaster, Pa.; Niles-Benton Harbor, Mich.; Battle Creek, Mich.; Muskegon, Mich.
The Bottom 10 MSAs, in order, are: Casper, Wyo.; Sherman-Denison, Texas; New Orleans-Metairie, La.; Houma-Thibodaux, La.; Lafayette, La.; Hammond, La.; San Angelo, Texas; Dallas-Plano-Irving, Texas; Charleston, W. Va.; Beckley, W. Va.
Showing the most improvement in the past year are, in order: Niles-Benton Harbor, Mich.; Mankato-North Mankato, Minn.; Glens Falls, N.Y.; Muskegon, Mich.; Brunswick, Ga.; Dover, Del.; Eugene, Ore.; Warren-Troy-Farmington Hills, Mich.; Flint, Mich.; Brownville-Harlingen, Texas.
Weakening the most in the past year, in order, are: Lafayette, La.; New Orleans-Metairie, La.; Charleston-North Charleston, S.C.; Sioux Falls, S.D.; Ithaca, N.Y.; Alexandria, La.; Sherman-Denison, Texas; Rapid City, S.D.; Texarkana, Texas-Ark.; Worcester Mass.-Conn.
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.