Nationwide Economics: Outlook for U.S. Housing Market at 3-Year High
At least one economic forecast sees a more positive, sustainable trend for the U.S. housing sector for at least the next year.
Nationwide Economics, Columbus, Ohio, said its Leading Index of Healthy Housing Markets is at its highest point in three years. Nationwide cited solid job growth and strong household formations as driving the positive outlook.
Through the first quarter, more than half (221) of the LIHHM regional performance rankings were positive, and only 27 were negative. By comparison, only nine LIHHM regional performance rankings were positive at the end of 2005, just before the last housing crisis, while 255 were negative.
“Economic figures from early in the year were probably negatively affected by the government shutdown as well as the impacts of higher interest rates over the second half of last year,” said David Berson, Nationwide senior vice president and chief economist. “Despite that, we believe that the housing market is poised for another solid year as slower house price growth and lower mortgage rates help affordability, while job gains and faster income growth sustain demand.”
The report said metro areas with the most positive LIHHM forecasts were Sumter, S.C.; Sebastian-Vero Beach, Fla.; Charleston, W.V.; Hinesville, Ga.; Abilene, Texas; Vineland-Bridgeton, N.J.; Port St. Lucie, Fla.; Montgomery County, Pa.; Springfield, Mass.; and Pittsfield, Mass. Markets with the least positive outlooks were Kennewick-Richland, Wash.; Pueblo, Colo.; Yakima, Wash.; San Jose, Calif.; Chico, Calif.; Manhattan, Kan.; Ames, Iowa; Ogden-Clearfield, Utah; San Rafael, Calif.; and Odessa, Texas.
At the regional level, existing home sales declined in 39 states for 2018, according to data from Moody’s Analytics. Many states saw declines greater than the national average, including drops of more than 8.0 percent in California, -9.7 percent; Washington, -8.9 percent; Connecticut, -8.3 percent; Massachusetts, -8.3 percent; and Pennsylvania, -8.1 percent.
