Housing market — Since 2022, the US economy has seen some of its lowest moments in modern history. The Federal Reserve’s main concern has been the continuation of inflation and the possibility of a recession. Inflation has had a wide-ranging influence on businesses, the majority of which are still being felt today.
Years of low mortgage rates, a global pandemic, and the Federal Reserve’s efforts to control inflation have all harmed the US home market. As a result, buyers and sellers are caught between a rock and a hard place.
Hard to find, harder to afford
In many parts of the country, property values have begun to level off or fall, meaning higher mortgage rates. While homes are difficult to find, they are much more difficult to afford, according to the National Association of Realtors.
In terms of housing market instability, certain states continue to outperform others, and companies are keeping a careful eye on the issue.
Because qualified personnel are in limited supply these days, company owners are looking for areas with expanding housing markets that may provide potential employees with both a smart investment and a pleasant place to live.
In CNBC’s annual competitiveness assessment, America’s Top States for Business, the housing sector is analyzed using business-like characteristics. In the 2023 method, housing is utilized as a statistic in the economic category. The approach considers a variety of factors to determine whether states have healthy housing markets, including:
- Foreclosure rates
- Housing starts
- Price appreciation
The technique includes the National Association of Realtors’ Affordability Distribution Score as an indicator in 2023, which measures the cost of houses for sale across income levels.
A housing market with a score of one or above is regarded as affordable. Anything less than one implies that the market is less affordable due to a lack of listings in local buyers’ price range.
Affordability, rank, and appreciation in the housing market
Florida’s housing market is expanding. As more individuals move to Florida, prices have progressively risen. As a result, the city’s residential building has grown.
Although underwater mortgages are hard to come by, a surge in foreclosures may indicate stress, endangering affordability in America’s expanding housing market.
2023 economy rank: No.1
South Carolina homeowners suffered massive price rises when the calendar moved to 2023. However, in comparison to other states, the property market in South Carolina was relatively inexpensive.
The affordability of South Carolina allows homebuilders to seize the opportunity with passion. Despite the good news, rising foreclosures remain a source of concern.
2023 economy rank: No. 7
Maine’s economy, like the great majority of states’, has come to a halt. Homebuyers, on the other hand, have discovered something unique, which is causing prices to rise.
Maine home builders claimed the lead in 2022, with high per capita activity ensuring affordability remained nearly unchanged.
2023 economy rank: No. 38
It will be offered to people and companies in North Carolina in 2023. As a result of being designated the finest state for business in 2023, housing demand has skyrocketed.
Furthermore, North Carolina’s robust building sector has aided in meeting demand. However, it has not been adequate to keep housing affordable for the growing population.
2023 economy rank: No.1
Despite its low cost of living, Georgia boasts a thriving real estate industry with double-digit growth. In any event, a rise in foreclosures may indicate stress.
2023 economy rank: No. 4
Indiana is frequently held up as a model of stability. Despite rising home prices, the year started on a high note in terms of accessibility. Furthermore, since the first quarter of 2023, when underwater mortgages were fairly uncommon, foreclosures have been on the rise.
2023 economy rank: No. 9
Due to house builders matching demand, the New Jersey housing market began 2023 well-balanced. Housing has contributed to New Jersey’s standing as the most business-friendly state.
Even if the mortgage is just slightly underwater, a spike in foreclosures might cause issues in the spring.
2023 economy rank: No. 19
Ohio has the most affordable homes in the country, according to the National Association of Realtors. However, it comes at a cost: mediocre price appreciation. Property purchasers are increasingly taking advantage of homeowners’ misfortune as foreclosure rates and hidden debts climb.
2023 economy rank: No. 21
The state is one of those with rapid price increases but minimal foreclosure activity. According to Redfin, the number of houses sold in Wisconsin declined by 20% in May, which was higher than the national average of 15.8%. Although it looks to have a negative impact, it is likely to help maintain high affordability.
2023 economy rank: No. 20
Home prices in Alabama are rising by double digits, according to the Federal Housing Finance Agency. Despite this unfavorable result, housing remains reasonably priced.
According to Attom Data Solutions, foreclosure activity is now at a low level, but many mortgages are projected to default.
2023 economy rank: No. 21