- Previously, we looked at the FHFA and Case-Shiller release focusing on national data trends. Today, we’ll dig a bit deeper to look at more local data at the regional, state, and city or MSA level.
- Monthly FHFA releases data at the Census division level and quarterly it releases state and metro area data. Case-Shiller offers data on 20-cities monthly. Both of these sources confirm the trend seen in NAR measures.
- At the regional level: the most robust home price gains from a year ago were in the West. NAR reported price change of 15.5% in December and 14.6% in January. According to FHFA year over year prices in December 2013 rose 14.9 percent in the Pacific division which includes Hawaii, Alaska, Washington, Oregon, and California and 12.6 percent in the Mountain division which includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico.
- Likewise, NAR data showed the smallest price gains from a year ago in the Northeast (3.5% for the year ending in December and 6.6% for the year ending in January), and FHFA showed a similar pattern. Prices rose 2.7 percent in New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut) and 2.1 percent in the Middle Atlantic states (New York, New Jersey, Pennsylvania) from December one year ago.
- State by state data, pictured below, shows more detail. Some states in the South had very robust growth: Florida, Georgia, and Texas, but the region as a whole had more moderate growth because of states with more modest home price growth or mild declines such as West Virginia, Arkansas, and Mississippi.
- Among cities, Case-Shiller reported the biggest year over year gains in Las Vegas, San Francisco, and Los Angeles. Each had more than 20% year over year gains. The smallest gains in Case Shiller’s cities were Cleveland at 4.5 percent and New York at 6.3 percent. While the cities covered differ, NAR saw similar trends with the largest home price gains in the 4th quarter out West in cities such as Sacramento and Las Vegas. NAR also saw substantial home price gains in Atlanta, a city that showed an 18.1 percent year over year gain by Case Shiller’s measure. In the quarterly release, FHFA produced a similar list of the top-20 metro areas. Again, the specific areas covered are different, but many of the top metro areas on FHFA’s list are out West including Modesto (CA), Stockton-Lodi (CA), and Vallejo-Fairfield (CA) as the top 3.
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.