Energy Patch States At Risk to See Home Prices Fall

A mortgage market review indicates Oklahoma housing prices can be expected to stay about the same level as they were in 2015, while other energy producing states could be facing a slide in prices. The Arch Mortgage Insurance Company (Arch MI) Winter 2016 Housing and Mortgage Market Review predicts the nation as a whole is at low risk to see housing prices drop. However, “energy patch” sates are significantly more at risk as oil and gas prices continue to fall.

“Nationwide, the housing market is likely to strengthen over the coming year in spite of economic headwinds from a strong dollar and expected gradual rate increases by the Federal Reserve,” said Arch MI Senior Director of Risk Analytics and Pricing Dr. Ralph G. DeFranco. “Despite this forecast, ‘Energy Patch’ states such as North Dakota, Wyoming, West Virginia and Alaska are at greatest risk of experiencing declining prices as their economies continue to slow due to continued fallout from the large drop in coal, oil and natural gas prices seen over the last year. In addition, Texas has the riskiest MSA’s due to oil price declines.”

Arch MI ranks Oklahoma in the moderate risk category. It expects little change is housing prices in the Sooner State. Lawton faces the highest risk of cities in Oklahoma of seeing prices fall. Oklahoma City and Tulsa metro housing prices are expected to match those of 2015.

Overall, the U.S. housing market is expected to be stable in 2016.

“Apart from these few exceptions, national prices should rise faster than inflation over the coming years due to a number of strong fundamentals, including a shortage of homes for sale or rent, better than average affordability, and continued job growth of 2 to 3 million jobs a year,” said DeFranco.



   

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