From floridarealtors.org
The likelihood of home price declines across the United States over the next two years remains low at 6 percent, according to the Arch Mortgage Insurance Company (Arch MI) Winter 2016 Housing and Mortgage MarketReview.
In addition, most of the risk from dropping home values is found outside Florida in energy-focused cities and states. “Energy Patch” states — ones that rely heavily on coal, oil or natural gas production — are significantly more at risk as they continue to experience the fallout from large drops in energy prices.
The report released by Arch MI models the state- and metro-level risk indices to predict the likelihood that home prices in a region will decrease over the next two years based on recent economic and housing market data.
“Nationwide, the housing market is likely to strengthen over the coming year in spite of economic headwinds from a strong dollar and expected gradual rate increases by the Federal Reserve,” said Ralph G. DeFranco, senior director of risk analytics and pricing at Arch MI.
“Despite this forecast, ‘Energy Patch’ states such as North Dakota, Wyoming, West Virginia and Alaska are at greatest risk of experiencing declining prices as their economies continue to slow due to continued fallout from the large drop in coal, oil and natural gas prices seen over the last year,” DeFranco added. “In addition, Texas has the riskiest MSAs due to oil price declines.”
DeFranco thinks the non-energy parts of the U.S. look good over the two-year span, however.
“National prices should rise faster than inflation over the coming years due to a number of strong fundamentals, including a shortage of homes for sale or rent, better than average affordability and continued job growth of 2 to 3 million jobs a year,” he said.