Posted 11/30/2017

Seeking affordability: Home prices most likely to drop in North

home prices

Aly J. Yale

The Mortgage Reports Contributor

Moving North

Buyers looking for low-priced housing in the next year or so may want to head North. According to the new Housing and Mortgage Market Review from Arch MI, Alaska, North Dakota and Wyoming are the states most likely to see home prices drop in the near-term.

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Alaska tops the list

Alaska has the highest likelihood of housing price declines in the next two years, with about a 39 percent chance, according to Arch MI’s report. North Dakota is next in line, with a 33 percent shot, while Wyoming comes in third at 31 percent.

FHA loan limits for Alaska and other states

According to Ralph DeFranco, global chief economist at Arch MI and author of the HaMMR report, “In the most recent quarter, we saw some improvement in North Dakota and Oklahoma thanks to a gradual recovery of energy prices, but a worsening of risk in Alaska due to continued weak employment, primarily in the energy and government sectors.”

Other states to watch

West Virginia prices have a 26 percent chance of dropping, while those in No. 5 Oklahoma have about a 16 percent shot.

At the metro level, Florida’s Fort Lauderdale-Pompano Beach-Deerfield Beach has a 35 percent chance of seeing home prices decline in the next two years, as does Nashville-Davidson-Murfreesboro-Franklin in nearby Tennessee.

All about perspective

Arch MI’s report also sheds light on today’s overall home prices – which many have said are at historical lows. According to the report, when adjusting for inflation, prices aren’t all that high at all.

“Based on today’s purchasing power of the dollar, national home prices remain 10 percent below their prior peak,” the report reads.

In fact, 46 percent of the nation’s biggest metros and 14 states are below their prior home price peak.

Read the full HaMMR report at MI.ArchCapGroup.com.

Get today’s rates

Want to get in on the markets where prices are poised to drop? Shop around and see what rates you qualify for today.

Verify your new rate (May 25th, 2018)

Aly J. Yale

The Mortgage Reports Contributor

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at AlyJYale.com or on Twitter

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)