Rising home values and an improved economy changed the foreclosure picture dramatically over the last two years. The decline in foreclosures and distressed sales resulted in less downward pressure on prices and more buyer confidence. To find out how your market performed, see the 4th quarter 2013 Local Market Reports.
Here are a few highlights from the reports:
- All 48 of the states in this sample experienced a decline in their foreclosure rates between the 3rd quarter of 2012 and 2013.
- The states with the largest declines were concentrated in areas hardest hit by the market decline, including Arizona and California.
- More than a third of markets bettered the U.S. average of a 25.7% drop in the foreclosure rate between the 3rd quarter of 2012 and the 3rd quarter of 2013.
While national employment growth has been tepid in recent years relative to typical economic recoveries, some markets have done very well. Roughly a third of markets covered by NAR have outperformed the national average over this time period. You can find out how your market performed in the 4th quarter 2013 Local Market Reports.
- The U.S. experienced employment growth of 3.47% between December of 2012 and December of 2013.
- 30.2% of markets in this sample outperformed the US average, while 87.2% experienced positive employment growth.
- Of the top 10 markets, four were in Florida and two in Texas.
Fundamentals like employment and affordability are key to sustained housing recoveries. Among the markets with the strongest improvements in employment over the 24-month period ending in June are Bismarck and Fargo, both of which have benefited from the oil boom in North Dakota. However, two of the top-five markets were in Texas which was only modestly impacted by the housing bust and subsequent financial crisis. The markets with weak employment growth are more idiosyncratic and reflect local trends. For additional information on employment trends in a particular market including industry trends, see the Local Market Reports for the 2nd quarter of 2013.
- The national homeownership rate peaked at 69% in 2004, but fell four percentage points to 65% in the 2nd quarter of 2013.
- Despite having experienced the large number of foreclosures in California and Florida, those states are not among the top five states in terms of change in homeownership, though Nevada is.
- In a moderate surprise, Kansas and Colorado experienced some of the largest declines.
- The housing market in Washington, DC benefited from strong employment conditions driven by the Federal government.
- Homeownership in New Hampshire and Massachusetts increased over this period.
- For additional information on homeownership trends in your state, see NAR’s Local Market Reports for the 2nd quarter of 2013.
Affordability has a strong impact on homeownership. Not surprisingly, four of five states with the lowest homeownership rates in the US are characterized by markets with high prices. Washington, DC has the lowest homeownership rate at 45.3%. At the opposite end of the spectrum, West Virginia, New Hampshire, Michigan, and Maine have among the highest affordability and homeownership rates. The dispersion of state homeownership rates is a wide 22.4 percentage points around the US average of 65%, split symmetrically at 11.2 points on either side, with the exception of DC. More information about state homeownership rates is available in the Local Market Reports for the 2nd quarter of 2013.