Magazine article Mortgage Banking

'Pockets of Resilience' despite National Home-Price Decline

Magazine article Mortgage Banking

'Pockets of Resilience' despite National Home-Price Decline

Article excerpt

Despite the housing market's problems (home prices across the United States have fallen 14 percent on a national basis), Nashville, Tennessee, was the lead metropolitan area among a number of "pockets of resilience" bucking the national trend during the second quarter of 2008, according to the Fiserv Case-Shiller [R] Home Price Index.

The index--which analyzes more than 375 U.S. markets and is owned and generated by Fiserv Inc., Brookfield, Wisconsin--noted that median home prices in Nashville have held steady over the past year at $156,000.

That is about 20 percent below the U.S. median house price of $196,000 for the first quarter of 2008, but lower housing prices have spelled greater affordability in housing markets across the country, according to Fiserv Chief Economist David Stiff.

"In Nashville, the median monthly mortgage payment in the 2008 first quarter accounted for 15 percent of monthly family income, compared to about 19 percent nationally," explained Stiff. "Employment trends in the Tennessee metro area have also been strong, with 5 percent growth in total employment over the past three years compared to 3 percent for the U.S. as a whole."

The markets outperforming national trends--including Nashville and several other southeastern U.S. metro areas outside of Florida--share a number of characteristics, said Stiff. They never got caught up in the housing bubble, homes in those areas remain affordable and a relatively strong local job market is helping sustain demand.

"The bursting of the housing bubble is playing out in one of several ways in metro areas across the U.S. By now, the most familiar and dramatic story is the erstwhile bubble markets in states including California and Washington, D.C., where prices raced far ahead of household income and developers built too many new homes," said Stiff. …

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