THE BIG FINISH
WRAP YOUR HEAD AROUND THE MARKET'S LEADING INDICATORS
96
TAPPING THE BRAKES
These 10 markets will experience home sales declines in 2019.
The economy is strong with unemployment at historic lows, but some are pointing to an economic slowdown. Is the housing bubble
about to burst? Definitely not, according to Ralph DeFranco, Global Chief Economist Mortgage Services at Arch Capital Services, Inc.
"The housing market is caught in the middle of a tug-of-war between poor affordability on one side and on the other, a strong
economy teamed up with a tight supply of homes," he said in Arch Capital Services' Winter 2019 Housing and Mortgage Market Review.
However, after persistent and steep price inclines, DeFranco says now, "The shift in the balance of power is clear. An undeniable
slowdown has arrived, particularly in the least affordable areas."
But take heart. It's not a bubble bursting. DeFranco says "there's no need to panic. The evidence suggests we are only moving
from a market that strongly favors sellers to a market more evenly balanced between buyers and sellers."
The quarterly Arch MI Risk Index, which measures where home prices are most likely to fall over the next two years, determined
that at the national level home prices have a 6 percent chance of declining over the next two years. This compares to a historic average
of 17 percent.
Source: Arch MI Risk Index
Alaska
Hawaii
THE 10 STATES WHERE PRICES HAVE THE
HIGHEST PROBABILITY OF DECLINING ARE:
West Virginia
Texas
Mississippi
Oklahoma
Colorado
Idaho
Wyoming
North Dakota
Connecticut
