October 30th, 2017
Housing markets across the U.S. will remain strong through the end of 2018, with a housing bubble not anticipated, according to the Fall 2017 edition of the The Housing and Mortgage Review?. The report, based on a statistical model that relies on recent housing market indicators, was released this week by the Arch Mortgage Insurance Company.
Some factors keeping the market strong include:
The report predicts that housing prices nationwide should remain high over the next 2 years. In fact, the probability that home prices will drop in the nation?s 401 largest cities averages just 4%, the report said.
However, some areas were more susceptible to price declines than others, such as energy-extraction regions which had the highest risk. Alaska topped the list with a 39% chance of a price decline over the next 2 years, followed by North Dakota, 33%; Wyoming, 31%; West Virginia, 26%; Oklahoma, 16%; Louisiana, 15%; New Mexico, 11%; Mississippi, 10%.
The risk for price reductions in the top 50 metros by population was about 33% over the next two years. The two metros with the highest risk at 35% were Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla., and Nashville-Davidson-Murfreesboro-Franklin, Tenn.
Another interesting revelation in the report is that while home prices nationwide are up and still rising, they haven?t reached their pre-crisis peaks when factoring in inflation, and the fact that the dollar doesn?t buy as much today as it did 10 years ago.
When inflation is considered, home prices nationwide are actually 10% lower now than they were in 2007, rather than 6% higher as calculated using the Home Price Index (HPI), the report said.
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