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.
- The strongest improvements in median sale prices over the four-quarter period ending in June of 2013 were dominated by markets from the Sun Belt and Atlanta. These markets experienced some of the largest price declines following the subprime bust and economic recessions which were followed with a subsequent spike in foreclosures.
- While investors in lower-priced properties in these markets led the early increases in home purchases and price growth in 2011, steady price appreciation in these markets has helped to attract additional investors and first-time homebuyers into the fray, spreading the price appreciation and stability to other portions of the market.
- Several of the markets that experienced price declines are in states with a judicial foreclosure which take additional time relative to non-judicial states and create uncertainty for lenders. This uncertainty has weighed on price recovery in judicial states.
- Additional information on price dynamics is available in the Local Market Reports for the 2nd quarter of 2013.