Nationwide’s Health of Housing Markets Report


Select a quarter and then press “Play” to initiate the interactive map. To get the performance ranking for a specific MSA, zoom in or scroll over the map or click on the numerical ranking legend for wider comparisons.

Next Release: March 19, 2019

2018Q4 HoHM Report: Housing outlook still mixed heading into 2019

  • The national LIHHM* has a neutral rating again this quarter, indicative of a mixed outlook for the housing sector over the next year. Despite a strong labor market and positive demographics, demand for housing is slipping in response to rising mortgage rates, which is worsening housing affordability.
  • Housing activity in many regional markets is also being pressured. More than half of MSAs now have a neutral or negative ranking — mainly due to the low inventory of homes on the market and the resulting rapid home price appreciation.  
  • The majority of the largest cities have a neutral outlook as market demand and supply remain imbalanced. Demand is being driven by job gains and household formations, but the supply of homes on the market remains quite low. 
  • Household growth has accelerated above the 15-year average in over 200 metro areas, a positive sign for continued housing demand. This suggests that sales activity should not decline sharply even as financing rates climb higher. 

Download HOHM Report

*Leading Index of Healthy Housing Markets (LIHHM): A data-driven view of the near-term performance of housing markets based upon current health indicators for the national housing market and 400 metropolitan statistical areas (MSAs) and divisions across the country.

Housing sector outlook for 2019 mixed with the LIHHM in neutral territory

The national LIHHM was little changed at a level of 102.2 this quarter, the third consecutive neutral ranking. The demand metrics within the LIHHM remain positive with an ultra-low unemployment rate and continued solid job gains. Demographics are also supportive of housing demand as the millennial generation ages into their prime homebuying years. While house price growth has decelerated in recent quarters, poor housing affordability continues to weigh on the outlook for housing. Several years of rapid price appreciation and steadily rising mortgage rates have begun to reduce homebuyer appetite for purchases.
 
Regionally, nearly half of the LIHHM performance rankings show a neutral rating, suggestive of a mixed outlook for housing growth in 2019. As with the national LIHHM, demand factors are generally positive in most areas, but supply conditions remain tight while affordability is a growing concern with price appreciation still at an unsustainable pace in many local housing markets.
 
National LIHHM

Authored by Nationwide Economics

DAVID BERSON, PhD

Senior Vice President, Chief Economist

David holds a doctorate in Economics and a master’s degree in Public Policy from the University of Michigan. Prior to Nationwide, David served as Chief Economist, Strategist and Head of Risk Analytics for The PMI Group, Inc., and Vice President and Chief Economist for Fannie Mae. David has also served as Chief Financial Economist at Wharton Econometrics and visiting scholar at the Federal Reserve Bank of Kansas City. His government experience has included roles with the President’s Council of Economic Advisors, U.S. Treasury Department and the Office of Special Trade Representative. He is a past President of the National Association for Business Economics.

BRYAN JORDAN, CFA

Deputy Chief Economist

Bryan is a frequent author and knowledgeable source on economic topics, and has been featured in The Wall Street Journal and New York Times. Bryan holds degrees in Economics and Political Science from Miami University and has earned the Chartered Financial Analyst designation. He currently serves as Chairman of the Ohio Council on Economic Education and is a member of the Ohio Governor’s Council of Economic Advisors, the National Association for Business Economics, and the Bloomberg monthly economic forecasting panel.

BEN AYERS, MS

Senior Economist

Ben authors periodic economic analyses from the Nationwide Economics team, as well as commentary on key economic topics. Ben is also responsible for understanding and analyzing the enterprise business drivers to assist the strategic planning process. He holds a Master of Science in Economics from the Ohio State University, specializing in applied economic analysis, and a BSBA from the Fisher College of Business at the Ohio State University, with a focus on economics and international business.

Additional contributors: Ankit Gupta, Steve Hall, and Aaron Reincheld

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This material is provided by Nationwide Economics and is general in nature. It is not intended as investment or economic advice, or a recommendation to buy or sell any security or adopt any investment strategy. Additionally, it does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. We encourage you to seek the advice of an investment professional who can tailor a financial plan to meet your specific needs. The economic and market forecasts in this report reflect our opinion as of the date of this presentation/review and are subject to change without notice. These forecasts show a broad range of possible outcomes. Because they are subject to high levels of uncertainty, they may not reflect actual performance. Case studies and examples are for illustrative purposes only. We obtained certain information from sources deemed reliable, but we do not guarantee its accuracy, completeness or fairness.