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: September 15, 2020
2020Q2 HoHM Report: Housing risks have increased, but not the rout seen during the Great Recession
- The national LIHHM* dropped to the lowest since 2010 this quarter as the COVID-19 recession lead to record-breaking job losses in March and April, a key input for housing demand. But the national index only fell to a neutral ranking, reflecting positive pre-COVID trends for delinquencies and household growth which have yet to show an impact from the downturn.
- Regionally, more than a quarter of MSAs across the country have a negative ranking in response to the significant decline in employment. This suggests a higher risk of a pullback in housing market readings over the next year in these local markets.
- While home sales should contract this year, especially for existing homes, the housing market is expected to recover more quickly from this recession. Low mortgage rates, positive demographics, and a projected sharp rebound in economic growth should drive faster home buying and building during 2021.
Housing outlook falls to lowest level since 2010
The dramatic worsening of the labor market due to COVID-19 caused the national LIHHM to fall sharply this quarter. The current neutral reading of 100.3 indicates a mixed outlook with some concerns about housing sustainability over the next year. Homebuyer demand is expected to weaken in response to significant job losses and the likely deceleration of household formations in the quarters ahead. This should be partially offset by record-low mortgage rates and the projected recovery in the economy over the second half of 2020 and into 2021 and beyond. Delinquencies and foreclosures are likely to rise modestly but forbearance options for COVID-impacted homeowners could limit these increases. House price gains were solid in early 2020 and should remain positive due to supply constraints, especially in the market for existing homes.
Regionally, about a quarter of the LIHHM performance rankings are now negative, indicating higher risks to housing health in those local markets. Additionally, over half of the ratings are neutral, reflecting the widespread impact of COVID-19 on job conditions around the country. The breakdown of rankings for the MSAs is the weakest it has been since 2010 with only about 10 percent of markets now rated positively.
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.