Home Prices Continue It’s Upward Move
Arch Mortgage released its Spring 2016 Housing and Mortgage Market Review.
The likely hood that home prices will decline across the U.S. over the next two years remains low at 5% according to Arch Mortgage. Regardless of the overall low risk of price decline, some areas in the country do not fall into this sweet spot. These states that will not see improvement in home prices are the one’s that are in the energy patch.
Statewide, Florida’s risk of a price decline over the next two years is only 2% in 24 counties here, including Broward, & Miami Dade. Palm Beach County only has a 3% decline risk.
The Spring 2016 Housing and Market review highlights the following:
- Texas registers the lowest risk of the Energy Patch states with an Arch MI Risk Index Score of 19, thanks to a more diversified economy. Employment in Texas remains positive but has weakened in recent months. Home prices continue to grow faster than the national average, leading to heightened risk scores for several Texas communities.
- Wyoming has an Arch MI Risk Index value of 40. The state is the nation’s largest coal producer and, as recently as late 2014, mining jobs represented 10 percent of the state’s total employment. Since then, mining employment has fallen 20 percent and workers are now leaving the state.
- West Virginia has an Arch MI Risk Index value of 35 and registered the nation’s second largest year-over-year decline in total employment (-1.5 percent). Housing in the state is weakening, with falling existing-home sales and an uptick in foreclosures.
- North Dakota has the highest Arch MI Risk Index value at 47 (a 47 percent change of any-sized price decline over the next two years), primarily due to a 4 percent drop in year-over-year total employment, the largest decline in the nation. North Dakota’s home prices are estimated to be overvalued by 22 percent relative to historic norms, likely due to the once-roaring oil fracking boom.
- Alaska’s Arch MI Risk Index value came in at 31. Low energy prices have pushed the nation’s most oil-dependent economy into recession and government layoffs. In spite of this, home prices and sales have held up well to date.
- Louisiana has an Arch MI Risk Index Score of 30. While the unemployment rate fell to 5.8 percent, the total employment rate fell 0.3 percent. Additionally, home sales have fallen.
- Oklahoma posted an Arch MI Risk Index Score of 24. The state is less diversified than neighboring Texas and total employment is falling slightly. Home price growth is below national averages, but accelerated in the fourth quarter of 2015.
- New Mexico registered a score of 30 on the Arch MI Risk Index due to the potential risk of recession caused by government- and energy-related job losses.