Most states reported moderate year-over-year job growth during Q1, which is positive given that most states are already at full employment. Job growth remained the strongest in the West, in the Southeast, and in Texas. Utah, Colorado, Nevada, and Washington reported the fastest job growth with growth rates of near 3% or more (more than twice the national growth rate). Major states such as California, Texas, Florida, and Arizona also reported job growth of 2% and more. States in the Northeast and Midwest saw job growth rates of around 1%, which were below the national average. North Dakota was the only states to report year-over-year job losses during Q1. Job growth is an important indicator of housing demand, and differences in growth rate across states translate into differences in housing demand.
Single-family homebuilding activities varied significantly across states in Q1. Homebuilders ramped up production in the West, with California, Idaho, New Mexico, and Colorado all reporting 30% or more growth. Surrounding states such as Washington, Utah, and Arizona also reported 10% or more growth. However, single-family building activities were uneven in other parts of the country, with a total of 23
states reporting lower number of single-family permits compared to a year ago.
Home prices continue to rise around the country in Q1, with every state reporting higher prices.
Nationally, home prices on home purchase loans collected by the Federal Housing Finance Agency (FHFA), increased 6.9% from a year ago. A total of 25 states reported faster home price growth. In the West, home prices in Washington, Idaho, Nevada, Utah, and Colorado all grew at 10% or more in Q1. In the Southeast, home prices saw growth rates between 6 and 9%. Home prices in Texas, California, and Arizona grew between 7 and 10%. At the other end of the market, home prices in Illinois, Mississippi, Oklahoma, and Louisiana, North Dakota, and West Virginia are appreciating at a slower pace, reflecting less robust economic conditions in those states.
For the mortgage market, higher home prices means that homebuyers will take on large mortgage debts on average. In the mortgage market, this will translate into higher average loan size, while loan count growth will likely slow down. For existing homeowners, higher home prices will result in higher home equity. Higher home prices also provide an incentive to homebuilders to increase production, which is one reason for the strong permit growth in the West.
Nationally, homeownership rate increased by 0.6 of a percent from a year ago to 64.2% in Q1. Homeownership rates increased for 31 states in Q1.