Solid job growth, declining delinquencies and improving demographics should keep the U.S. housing economy strong in 2017, according to a new report from insurer Nationwide.
The company, in its latest housing barometer, said that the majority of the most sustainable housing markets in the country are located east of the Mississippi River, including New York City, Boston, Chicago and Philadelphia.
These markets are likely to see continued sustainable growth in home sales activity and house price appreciation in 2017. This quarterly report from Nationwide evaluates the housing health for the U.S. and 400 metropolitan statistical areas (MSAs).
Overall, it indicates that the vast majority of local housing markets will experience sustainable housing activity during the next year with little chance of substantial downturns. The HoHM Report also found that unsustainable house price growth is lowering affordability in four cities in the western half of the country: Dallas, Denver, Portland and San Francisco.
Nationwide also found that:
- Regionally, the rankings show positive housing trends in the majority of metropolitan statistical areas (MSAs). This suggests that most local housing markets should see sustainable expansion over the next year.
- Energy sector slowdowns continue to depress the housing outlooks in several MSAs in energy-intensive areas, especially in North Dakota, Wyoming, Texas, and Louisiana.
- Stabilizing oil prices and employment readings, however, are likely to improve the housing metrics in these regions.
- More than a quarter of MSAs are rated as healthy and most sustainable — indicating a positive outlook for 2017 and a very small likelihood of a downturn in housing activity.
Rising mortgage rates might dim the optimism somewhat, as would an economic downturn. But for now the housing market looks set to have a banner year.