Sometimes national housing metrics don’t tell the whole story when it comes to determining recovery across the country. Taking a deeper look at the metropolitan statistical areas (MSAs) can help pinpoint which areas are recovering above the national levels and which are still falling short.
In the latest Quarterly Debt Monitor from the St. Louis Fed, four smaller MSAs are compared to each other and the national average based on mortgage debt and mortgage serious delinquency rate.
Evansville, Indiana-Kentucky; Fayetteville-Springdale-Rogers, Arkansas-Missouri; Jackson, Tennessee; and Springfield, Missouri each had housing activity that showed robust signs of strength, according to the monitor.
“Not surprisingly, house prices have increased by 13 percent since the second quarter of 2013, according to the Federal Housing Finance Agency (FHFA) house price index,” says the report.
The Zillow market health index for the Fayetteville metro area was 9.7 out of 10 at the end of September, making the MSA "very healthy, says the report. In contrast, the St. Louis Fed reports that the Zillow index for the Springfield metro area was 6.4, or "healthy." Further, the monitor adds that Zillow's index for Evansville and Jackson was 3.1 and 3.6, respectively, making both metros "less healthy."
The report says that mortgage debt encompasses the largest consumer liability, with the average mortgage in Fayetteville costing $18,000 to $24,000 more than in the other MSAs.
“This possibly is the result of a robust local economy and housing market. HELOC and student debt comprise the next highest liabilities,” says the report.
Specifically, mortgage debt saw a -1.7 percent change in per capita consumer debt. Springfield, Fayetteville, and Evansville all saw a decrease in mortgage borrowing, according to the report, of -1.0 percent, -1.2 percent, and -2.6 percent, respectively. Jackson was the only area of the four MSAs that had an increase in mortgage borrowing (2.4 percent).
Additionally, each of the four MSAs experienced a decrease in mortgage serious delinquency rates. Nationally, the rate dropped 0.6 percent, but Evansville and Jackson fell further than the national rate by 0.7 percent and 1.3 percent, respectively.
“The rates for mortgage debt declined in the latest quarter and have reached pre-recession levels,” adds the report. “Serious delinquency rates are generally falling in the smaller MSAs.”