Housing market — Since 2022, the economic landscape in the United States has witnessed some of the greatest lows in recent history. The persistence of inflation and looming fears of a recession have been a top concern for the Federal Reserve.The impact of inflation has spread out to numerous industries, most of which continue to be felt today.
The housing market in the country is among the heaviest casualties, having endured low interest rates for years, the global pandemic, and the Federal Reserve’s efforts to curb inflation. As a result, buyers and sellers are caught between a rock and a hard place.
Read also: Home prices 0.1% higher than May data
Hard to find, harder to afford
Across the country, home prices have started either leveling off or declining in several areas reflecting the higher mortgage rates. The National Association of Realtors, however, reported that while homes are difficult to find, they are even harder to afford.
Several states are still handling the change in the housing market better than others, and companies are keeping a close eye on the situation.
As qualified workers are a scarce resource today, business leaders are looking for areas that have healthy housing markets capable of providing prospective employees a smart purchase and giving them a happy home.
America’s Top States for Business, an annual competitiveness study developed by CNBC, measures housing market similar to methods used by companies. In the 2023 methodology, housing is used as a metric in the economy category. The method considers multiple factors to determine which states have thriving housing markets, including:
- Affordability
- Foreclosure rates
- Housing starts
- Price appreciation
In 2023, the method included NAR’s Affordability Distribution Score as a metric, which examines the affordability of homes for sales throughout the income levels.
Scores of 1 or higher indicates that a housing market is affordable. Anything less than 1 suggests the market is less affordable due to a lack of listings in the local buyers’ range.
Affordability, rank, and appreciation in the housing market
Florida
Florida’s housing market is a thriving one. With people flocking to Florida, the prices have been witnessing a steady increase. As a result, the city has witnessed a home-building boom.
Although underwater mortgages are hard to come by, rising foreclosures could suggest a sign of stress, which would ultimately bring affordability down in America’s strong housing market.
2023 economy rank: No.1
Appreciation: 15.2%
Affordability: 0.5
South California
When the page turned over to 23, the Palmetto State homeowners witnessed solid price appreciation. However, the housing market in South Carolina saw affordable prices, especially when compared to other regions.
The affordability of South Carolina’s helps homebuilders meet the moment with strong activity. Despite the good news, rising foreclosures present a problem.
2023 economy rank: No. 7
Appreciation: 13%
Affordability: 0.68
Maine
Like most states, Maine has endured a lackluster economy. However, home buyers have found something unique, helping prices go upward.
In 2022, homebuilders in Maine took the cue using strong activity on a per capita basis, which has allowed affordability to remain more or less stable.
2023 economy rank: No. 38
Appreciation: 12.2%
Affordability: 0.67
North Carolina
In 2023, North Carolina has seen people and companies running to it. Due to the 2023 No. 1 State for Business, housing demand has been handed a price boost.
In addition, strong construction activity in North Carolina has been helpful in meeting the demand. However, it hasn’t been enough to keep homes in range of the growing population.
2023 economy rank: No.1
Appreciation: 13.4%
Affordability: 0.6
Georgia
The Peach state is showing solid housing numbers, which covers double-digit appreciation despite being relatively affordable. Regardless, rising foreclosures could indicate possible signs of stress.
2023 economy rank: No. 4
Appreciation 11.4%
Affordability: 0.65
Indiana
Indiana is frequently touted as a picture of stability. This year, it entered with solid affordability despite home prices increasing. In addition, foreclosures have been on the rise after underwater mortgages were relatively low in the first quarter of 2023.
2023 economy rank: No. 9
Appreciation: 9.5%
Affordability: 0.9
New Jersey
The Garden State’s housing market kicked off 2023 well-balanced due to home builders keeping pace with the demand. Housing has contributed to New Jersey becoming the most-improved state for business.
Even with underwater mortgages low, there could be trouble in the spring with an increase in foreclosures.
2023 economy rank: No. 19
Appreciation: 8.3%
Affordability: 0.68
Ohio
The National Association of Realtors have tipped Ohio as having America’s most affordable housing. However, it also comes with a price: the cost of less-than-stellar price appreciation. Home buyers are also taking advantage of homeowners’ misfortune, with high foreclosure rates and underwater mortgages increasing.
2023 economy rank: No. 21
Appreciation: 8.7%
Affordability: 1.00
Wisconsin
The state is among those seeing healthy price appreciation and low foreclosure activity. Redfin reported that the number of homes sold in Wisconsin dropped in May by 20%, higher than the national average of 15.8%. Although it may seem like an adverse effect, it is likely to help maintain strong affordability.
2023 economy rank: No. 20
Appreciation: 10.03%
Affordability: 0.76
Alabama
According to the Federal Housing Finance Agency, prices are rising in Alabama by double digits. Although a negative takeaway, housing is still affordable.
Attom Data Solutions reported that foreclosure activity is still low, but a concerning percentage of mortgages are touted to hit default.
2023 economy rank: No. 21
Appreciation: 10.25%
Affordability: 0.74
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