A newly released national housing report indicates the Baton Rouge metro area’s housing market should remain healthy, thanks in part to positive trends in job growth, home affordability and sales and other sustainability indicators, says Nationwide Insurance’s Senior Economist Ben Ayers.
“Compared to other MSAs in Louisiana, you guys are doing quite well, mainly because you don’t have a strong tie to the energy sector,” Ayers says.
Nationwide’s “Health of Housing Markets Report” is a forward-looking document on the health of housing markets nationally and for 400 metro areas throughout the country.
The second-quarter report was released this week and contains an index ranging from a scale of -4 to 4 that acts as a barometer of the health of the housing market in a metro area. A positive number indicates a healthy market.
The Baton Rouge metro area has been assigned a performance rating of 2 on the index.
Ayers that rating is due in large part to the fact that job growth is up about 2% over the past year. Home prices remain affordable and in line with incomes, he says.
“It’s a very healthy market,” says Ayers, adding that the market is “right where it should be.” Comparatively, the Baton Rouge metro area had a performance rating of 1 in the first quarter of 2015.
Nationwide measures MSAs by market drivers that are grouped into four categories: house prices, demographics, employment and the mortgage market. Nationally, the vast majority of metro areas across the country are healthy, Ayers says. Mortgage delinquencies and foreclosures are down.
“Steady employment gains mean most Americans are able to meet their mortgage obligations, while house price gains have helped reduce the number of underwater mortgages—leading to lower default rates and a healthy outlook for the housing market in the next year,” Nationwide says in its report.
The exception, though, are Louisiana markets deeply rooted in the energy sector, the report says.
The downturn in that sector is weighing heavily on job growth and housing sustainability in MSAs such as Lafayette and Houma-Thibodaux—both have a rankings of 0 on the index—as well as MSAs in Texas, North Dakota and Wyoming.
Read the full report and see an updated interactive map of Nationwide index scores for U.S. metro areas.
