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: December 11, 2018.

2018Q3 HoHM Report: Outlook stuck in neutral as price gains accelerate

  • The national LIHHM* remained at a neutral rating this quarter, indicating a mixed outlook for housing market health. Historically low inventories are holding back sales while pushing prices upward. Combined with rising mortgage rates, the resulting hit to housing affordability could begin to weigh on demand soon.
  • Housing health in many regional markets is also being pressured by rising prices. While still half of MSAs are ranked positive, more markets have fallen into neutral or negative rankings, mainly due to unsustainably rapid price growth. 
  • Moreover, the imbalance between supply and demand is causing home prices in more local markets to heat up. Price gains have accelerated in two-thirds of the country’s 400 metro areas over the past year — further challenging the search for affordable housing for homebuyers.
  • Overheated markets now dominate the bottom 10 list, led by outsized price gains in San Jose as well as many MSAs in the Pacific Northwest. Several MSAs in Pennsylvania, New Jersey, and Iowa — where price gains are positive but modest — are on the top 10 list.

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 remains guardedly optimistic with the LIHHM in neutral territory

The national LIHHM edged upward to 102.2 this quarter, a value still in neutral territory. Lifting the LIHHM higher were mortgage delinquency rates recovering from last fall’s hurricanes along with stronger household formations. Without the temporary negative from last year’s hurricanes on serious delinquency rates, the national LIHHM would be rated as positive, although barely. Worsening affordability is a challenge for housing sector sustainability as a historically low supply of homes for sale is causing prices to climb at a rapid pace. Demand metrics remain solid with low unemployment and continued solid job gains as well as positive demographics from the millennial generation increasingly aging into their 30s. 
 
Regionally, the LIHHM performance rankings show that about half of MSAs have a positive rating this quarter, signaling that a downturn in housing is highly unlikely over the next one to two years. An increasing number of metro areas are rated as neutral, however, primarily due to unsustainable price gains in local markets with rising affordability concerns for homebuyers. 

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.