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According to the Quarterly Arch MI Risk Index, the Risk of Home Price Declines Has Increased

GREENSBORO, N.C.–(BUSINESS WIRE)–#loanoriginators–America’s fastest-growing housing markets are as varied as Cape Coral, Florida, and San Francisco, California, but share key characteristics that set the stage for growth and attracting young job seekers, according to the Summer edition of The Housing and Mortgage Market Review (HaMMR), released today by Arch Mortgage Insurance Company (“Arch MI”), a leading provider of mortgage insurance and a wholly owned subsidiary of Arch Capital Group Ltd.

The HaMMR report also examines the 15 slowest-growing cities and analyzes the data on what spurs people aged 25–44 to relocate and how they choose a new city.

Dr. Ralph G. DeFranco, Global Chief Economist for Arch Capital Services Inc., and his team identified the 15 fastest growing job markets in the past five years — where employment growth of 16–23% far exceeds the national average of 9.4%.

“We went looking for what is powering these modern American boomtowns. We found it is not just tech jobs, city size or affordability, even though those do help,” he said. “We think it’s encouraging that there are multiple routes to becoming a magnet for economic activity. Strong growth can come from a favorable business climate, a strong tech sector and, of course, some luck in being well located for today’s growing industries and younger workers’ desire for outdoor recreation.

“We also looked at the flip side — where new boomtown residents are typically moving from, namely areas that are economically weaker and have much less job growth,” DeFranco added.

 

 

The 15 Fastest-Growing Job Markets Over the Past Five Years

City

5-Year %

Change in

Employment

 

 

City

5-Year %

Change in

Employment

1. Cape Coral, FL

23%

9. Las Vegas, NV

18%

2. Boise City, ID

21%

10. Fresno, CA

18%

3. Orlando, FL

21%

11. North Port, FL

17%

4. San Francisco, CA

20%

12. Ogden, UT

17%

5. Riverside, CA

19%

13. Phoenix, AZ

17%

6. Nashville, TN

19%

14. Charleston, SC

17%

7. Austin, TX

19%

15. Charlotte, NC

16%

8. Dallas, TX

18%

 

 

Sources: U.S. Bureau of Labor Statistics/Arch MI

The slowest-growing job markets among the top 100 metro areas include three cities in Connecticut (Bridgeport, New Haven and Hartford); Gary, Indiana, and Buffalo, New York.

The quarterly Arch MI Risk Index, a statistical model based on nine indicators of the health of local housing markets, suggests the probability of home prices being lower in two years is 11%, an increase from 9% last quarter. Nationally, the overall national risk of a decline in home prices remains well below 20%, the average from 1980 to today.

The states with the highest risk of having lower home prices in two years are North Dakota at 24%, followed by Idaho and Oregon, both at 23%, and Colorado and West Virginia, both at 22%.

Among the 100 largest metros, Florida’s Lakeland-Winter Haven MSA has the highest Risk Index value (45%) after house price appreciation slowed significantly over the past six months. Miami, Florida, is second at 40% due to a glut of unsold condos and home prices that appear overvalued. The rest of the “top 5” includes Denver, Colorado (35%), Boise, Idaho (32%) and Riverside-San Bernardino-Ontario, California (32%).

Commentary resources:

  • The Housing and Mortgage Market Review is posted at archmi.com/hammr. The Summer 2019 edition focuses on success factors in the 15 cities leading the nation in job growth and the factors that influence homebuying decisions by job seekers under the age of 45 who are relocating.
  • DeFranco will host a Housing Update webinar discussing market conditions and the details of HaMMR on Aug. 1 and 2. Registration is free at archmi.com/hammr.

Summer 2019 Arch MI Risk Index

States with the Highest Risk Index Values (Probability of Price Decline Times 100)

State

Risk Index

Change in Quarter

North Dakota

24

-3

Idaho

23

12

Oregon

23

2

Colorado

22

6

West Virginia

22

0

Alaska

21

-3

Washington

21

2

Connecticut

19

-3

Wyoming

19

-4

California

18

6

About Arch Mortgage Insurance Company

Arch Capital Group Ltd.’s U.S. mortgage insurance operation, Arch MI, is a leading provider of private insurance covering mortgage credit risk. Headquartered in Greensboro, North Carolina, Arch MI’s mission is to protect lenders against credit risk, while extending the possibility of responsible home ownership to qualified borrowers. Arch MI’s flagship mortgage insurer, Arch Mortgage Insurance Company, is licensed to write mortgage insurance in all 50 states, the District of Columbia and Puerto Rico. For more information, please visit archmi.com.

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may include forward-looking statements, which reflect our current views with respect to future events and financial performance. All statements, other than statements of historical fact included in or incorporated by reference in this release, are forward-looking statements.

Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or their negative or variations or similar terminology. Forward-looking statements involve our current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions of rating agencies and our ability to maintain and improve our ratings; investment performance; the loss of key personnel; the adequacy of our loss reserves, severity and/or frequency of losses, greater than expected loss ratios and adverse development on claim and/or claim expense liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; our ability to successfully integrate, establish and maintain operating procedures and integrate the businesses we have acquired or may acquire into the existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; availability and cost to us of reinsurance to manage our gross and net exposures; the failure of others to meet their obligations to us and other factors identified in our filings with the U.S. Securities and Exchange Commission.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

ARCH MORTGAGE INSURANCE COMPANY | 230 NORTH ELM STREET GREENSBORO NC 27401 | ARCHMI.COM MCUS-B1025B-0719

© 2019 Arch Mortgage Insurance Company. All Rights Reserved. Arch MI is a marketing term for Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company. The Housing and Mortgage Market Review and Arch MI Risk Index are registered marks of Arch Capital Group (U.S.) or its affiliates. HaMMR is a service mark of Arch Capital Group (U.S.) or its affiliates.

Contacts

Arch Capital Services Inc.

Greg Hare, 336-333-0416

Method Communications

Margaret Bonaparte, 415-891-4914