Warren Buffett on CNBC: I'd Buy Up 'A Couple Hundred Thousand' Single-Family H
Metro Milwaukee housing market ranks 3rd in nation
Dec. 16, 2015
By Paul Gores of the Journal Sentinel
The metropolitan Milwaukee housing market is the third-healthiest in the nation, a rank stemming from solid job growth and moderate home price increases, a report released Wednesday by Nationwide insurance says.
For its forward-looking Health of Housing Markets Report, Nationwide measures local employment, demographics, the mortgage market and house prices in 400 metro areas.
"Looking at Milwaukee, all four categories look pretty good. It really is a balance of all four," Ben Ayers, a senior economist with Nationwide, said in an interview. "You guys have relatively strong, solid job growth, and unemployment has been declining pretty well over the past year."
The most sustainable housing markets in the nation tend to be located in the Midwest, with steady job gains, accelerating household formations, and house price appreciation that is mostly in line with incomes, Nationwide said.
"You might look at Milwaukee and see only about 2% to 3% home price growth. But we consider that a positive because we view that as being in line with what income growth is doing, and keeping affordability at a very high level," Ayers said. "Looking at Milwaukee we see affordability doing really well, mainly driven by very sustainable increases in house price. We're not seeing double digits or anything crazy like you would see in Denver or San Francisco right now."
Lower energy prices continue to weaken the outlook for regional housing markets with strong ties to the energy sector, Nationwide said.
Overall, Nationwide said, the U.S. housing market is continuing to see positive momentum, helped strongly by low and falling unemployment rates. That has sparked increased demand among renters and buyers.
The U.S. housing market is healthy overall, with little chance of a downturn in the next year, Nationwide's latest quarterly housing market barometer concluded.
"In most regional markets we're seeing that housing fundamentals are close to the strongest they've been in almost a decade," David Berson, Nationwide's senior vice president and chief economist, said in a statement. "This is thanks to a strong labor market, low mortgage rates and an uptick in the pace of new household formation, which tends to rise as employment conditions improve."
Berson said that while some may view rising interest rates in 2016 as a negative for housing, it's unlikely to have an immediate impact on the housing market.
"Given the current low level of mortgage rates, as well as solid job growth, it could take a substantial rise in interest rates to dramatically impact the outlook for the housing market," he said.
The high ranking for Milwaukee seems to square with reports from the Greater Milwaukee Association of Realtors. Last week, the local Realtors organization reported that sales of existing homes in the metro Milwaukee area rose 5% in November, marking 10 consecutive months of year-over-year increases.
Heading into the final month of 2015, home sales were up 11.2% for the year, at 17,674 from 15,895 during the same span last year in the four-county Milwaukee metro area.
A separate report Wednesday said new-home construction in the United States rebounded in November, led by gains in single-family dwellings that signal the residential real estate industry will continue to support growth in the world's largest economy.
Housing starts climbed 10.5% to a 1.17 million annualized rate from a 1.06 million pace in October, figures from the Commerce Department showed. That was more than economists expected, according to Bloomberg News.
THE TOP 10
1. Springfield, Ill.
2. Niles-Benton Harbor, Mich.
4. Akron, Ohio
5. Dayton, Ohio
6. Battle Creek, Mich.
7. Springfield, Ohio
8. Midland, Mich.
9. Toledo, Ohio
10. Saginaw, Mich.
THE BOTTOM 10
1. New Orleans-Metairie, La.
2. Sherman-Denison, Texas
3. Watertown-Fort Drum, N.Y.
4. Sioux Falls, S.D.
5. Hammond, La.
6. Odessa, Texas
7. Austin-Round Rock, Texas
8. Casper, Wyo.
9. Dallas-Plano-Irving, Texas
10. Houma-Thibodaux, La.
omes If I Could
Published: Monday, 27 Feb 2012 | 6:17 AM ET
By: Alex Crippen| Executive Producer
Warren Buffett and Becky Quick in Omaha
Warren Buffett says along with equities, single-family homes are a very attractive investment right now.
Appearing live on CNBC's Squawk Box, Buffett tells Becky Quick he'd buy up "a couple hundred thousand" single family homes if it were practical to do so.
If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks. He advises buyers to take out a 30-year mortgage and refinance if rates go down.