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Study Reveals Housing Market To Be At Its ‘Healthiest’ Level Since 2001

HandGrabbingHouseIn its first-ever analysis of the U.S. housing market released Thursday, Nationwide Economics indicated that the national market was at its healthiest level in 14 years.

Nationwide's Health of Housing Markets (HoHM) Report – Q1 2015 is the first report in a planned quarterly series of reports. Using a metric known as the Leading Index of Healthy Housing Markets (LIHHM), Nationwide said the health of the overall housing market in the United States suggest there is little reason to believe that another downturn will occur in housing during the coming year. The LIHHM is a data-driven view of the near-term performance of housing markets based on current health indicators for the national housing market and 373 metropolitan statistical areas (MSAs). LIHHM ratings focus on the entire housing market and not just prices or sales, according to Nationwide.

The national LIHHM was reported to be 109.8 for Q4 2014, a modest increase from the previous quarter and its highest level since 2001, the earliest available data. According to Nationwide, a value of 100 for the LIHHM suggests a healthy housing market, and the likelihood of a downturn decreases the higher the value climbs above 100.

"In the fourth quarter, the employment, mortgage market, and house price growth components of the LIHHM remained positive," Nationwide wrote in the report. "Household formations increased at a faster pace, but a continued tight mortgage lending environment remains an impediment to even stronger national housing activity."

Regionally, none of the nation's 40 largest MSAs received a "negative" LIHHM rating. The only two MSAs that received a negative rating were Bismarck, North Dakota, and Atlantic City, New Jersey, and those two were close to being "neutral." Pittsburgh, Cleveland, and Philadelphia were the MSAs that received the healthiest LIHHM ratings, according to Nationwide.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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