The risk Florida home values will decline?

Real Estate Broker/Owner with NextHome Antonelli Realty 3137972

The likelihood of home price declines across the United States over the next two years remains unchanged at only 4 percent, according to the latest Arch MI Risk Index. And in Florida it's even lower – only 3 percent.Florida home prices to decline

The risk of price declines continues to drop, according to the Winter 2017 edition of The Housing and Mortgage Market Review (HaMMR) published by Arch MI. One year ago, it was 6 percent across the U.S.; two years ago, it was 8 percent.

In addition, much of the overall risk comes from a handful of states dependent on energy that took a hit when gas prices declined. Only Wyoming and North Dakota are ranked at an "elevated risk," while Alaska, West Virginia, Oklahoma, Louisiana and New Mexico are considered a "moderate risk."

And while Florida's risk is considered "low" at only 3 percent, 37 of U.S. states are considered "minimal risk" with the chances of a price decline over the next two years 2 percent or less.

No U.S. bubble

"Housing is not in a bubble relative to incomes or monthly payments, either in a historical or international context," says Dr. Ralph G. DeFranco, global chief economist, mortgage services of Arch Capital Services Inc. "Even as homeownership remains out of reach for many people, a growing housing shortage will continue to push up national home prices faster than inflation for the foreseeable future."

DeFranco cites positive fundamentals for affordability, such as below-normal mortgage rates, employment growth of 2 to 2.5 million jobs a year, an extremely tight inventory of homes for sale, accelerating rent increases.

"While there are many negatives ranging from weak wage growth to a near-tripling of student debt over the past 10 years, rapid price growth suggests the supply shortfall is more important," DeFranco adds. "Given these positives for home prices, it isn't surprising that our models give a very low chance that home prices could be lower in two years in the vast majority of cities across the country."

© 2017 Florida Realtors



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Nathan Gesner
American West Realty & Management - Cody, WY
Broker / Property Manager

Good article. I'm expecting good things in 2017 but I also expect a slowing market thereafter.

Jan 14, 2017 05:29 AM #1
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Paul- that sounds like good news, and the kind of information that sellers and buyers are interested in. 

Jan 14, 2017 12:03 PM #2
Mick Michaud
Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107 - Granbury, TX
Your Texas Lifestyle is Here!

Let's hope the risk stays small.  I just saw an artilce on CNBC talking about FHA has reported the first uptick in payment delinquencies since '06.  Canary in the coal mine?

Feb 17, 2017 06:18 AM #3
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Paul Antonelli

Broker Owner; NextHome Antonelli Realty
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