A new national housing report released by Nationwide insurance company shows that Baton Rouge is “clearly the best” market in Louisiana right now, says Nationwide Senior Vice President and Chief Economist David Berson.
“The big difference in Baton Rouge is really what’s been happening with job growth,” says Berson, noting the Baton Rouge metro area posted a 2.5% job growth rate in the first quarter of this year compared to the year previous. “In New Orleans, the job growth has slowed dramatically for them to about 0.3% through the first quarter. Baton Rouge has been stronger, in part, because it’s far more diversified. Shreveport is right up there with Baton Rouge right now, but Baton Rouge is clearly the best market in the state.”
Columbus, Ohio-based Nationwide’s “Health of Housing Markets Report” measures housing markets across the country based on four major categories: year-over-year job growth, housing prices and affordability, overall home sales, and mortgage markets. The index is relatively new, having only been created two quarters ago. Nationwide plans on updating it quarterly from here on.
The index assigns a number—ranging from -4 to 4—to each of America’s 400 metropolitan statistical areas. The Baton Rouge market is at a 1 in the first quarter report, released last week. A positive number indicates a healthy market, says Berson, but that doesn’t mean a 4 rating is necessarily a good sign.
“If you’re at a 4, you’re really too hot, and that likely indicates that prices are rising much faster than average wages can keep up,” he explains. “The way to think about the index is really as a sustainability index. It’s a Goldilocks measure. You want the porridge to be hot, but not too hot.”
The Nationwide index suggests “that the U.S. housing market is healthy, with little chance of a national housing downturn over the next year,” according to the report. Across America, just eight of the nation’s 400 metro areas have a negative number in the Nationwide first quarter index. Among them are New Orleans, Houma and Lafayette, all at -1. Shreveport is rated a 1, while Monroe and Alexandria are both at 0.
“It’s way too cool in New Orleans and the parishes down there,” Berson says of the housing markets, “and that’s mostly because of slow job growth.”
Though Nationwide only recently began making the index scores public, Berson says it has been compiling the scores for much longer for internal business uses.
Access the complete report, and see an interactive map of Nationwide index scores for all of the country’s metro areas dating back to 2001.