GREENSBORO, N.C. – April 4, 2017 – What are the chances home prices will decline as they did during the recession? Almost none.
The likelihood of home price declines across the United States over the next two years is unusually low – only 4 percent, according to the latest Arch MI Risk Index statistical model for Spring 2017.
That 4 percent chance is down, on average, across all states and large cities from 5 percent a year ago and 8 percent two years ago.
Overall, risk was stable this quarter, with minor changes in the riskiest regions that are predominantly coal-, oil- or gas-producing areas. No state had greater than a 50 percent chance of home price declines, suggesting home price growth is likely and will be widely shared.
“The vast majority of housing markets across the nation remain healthy and are projected to stay that way through 2018,” says Dr. Ralph G. DeFranco, global chief economist at mortgage services of Arch Capital Services Inc. “Looking back at 2016, home prices grew 6 percent and rose in all 50 states. This year, conditions are in place for home prices to grow faster than incomes as a result of a tightening job market, still relatively low interest rates, tight supply and an overall shortage of housing.”
On a state level, North Dakota, Wyoming and Alaska remain the three states most at risk of home prices declines. Thy states continue to be impacted by weak employment and home sales due to the unwinding of the energy boom or from high inventories of homes for sale.
In the latest Arch Report posted online, Q3 2016, the chance that Florida would see any noticeable price declines over the next two years was only 8.1 percent.
© 2017 Florida Realtors