[1]The majority of metro housing markets are showing signs of health, which will make for sustainable growth in the near-term, according to Nationwide's Health of Housing Markets (HoHM) Report [2].
The national Lending Index of Healthy Housing Markets (LIHHM), a view of the near-term performance of markets, value is at 109.1, where a number over 100 suggests health and slim chances of a downturn in the next year.
Nationwide reported that while affordability is still an important factor, home price increases could weaken the LIHHM, thus making homes less affordable.
[3]Affordability is a big problem in Colorado, Texas, and on the Coasts, mostly due to job cuts in these energy-producing along with job losses in energy-producing states.
“On a national level, housing affordability is fairly valued, with little sign of a housing price bubble,” said David Berson, Nationwide’s SVP 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.”
Berson continued, “Alternatively, markets with strong ties to the energy sector, such as Wyoming and Louisiana, are seeing weakening housing markets. This is, in part, due to job losses caused by lower oil prices.”
Report Highlights:
- 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.
The top five MSAs in the index are: Kankakee, Illinois; Harrisburg-Carlisle, Pennsylvania; Dayton, Ohio; Yakima, Washington; and Lansing-East Lansing, Michigan.
The bottom five MSAs in the index are: Casper, Wyoming; Sherman-Denison, Texas; New Orleans-Metairie, Louisiana; Houma-Thibodaux, Louisiana; and Lafayette, Louisiana.
[4]Click here [2]to view Nationwide's full report.