Slideshows

States with the Healthiest Housing Markets

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Cindy Perman@CindyPerman
WATCH LIVE

Healthiest Housing Markets

No doubt, some housing markets were hit harder than others during the recession. As a result, the markets less banged up are poised to be the first to bounce back when the housing recovery takes off.“You have some markets where so many things have gone wrong; it’s very difficult for those markets to make a recovery,” said Cameron Findlay, the chief economist at . “Then, there are other markets, where only a couple things have gone wrong. For those markets, there’s still hope of a recovery.”Lendi
Photo: Don Klumpp | Photographer's Choice | Aurora | Getty Images

No doubt, some housing markets were hit harder than others during the recession. As a result, the markets less banged up are poised to be the first to bounce back when the housing recovery takes off.

“You have some markets where so many things have gone wrong; it’s very difficult for those markets to make a recovery,” said Cameron Findlay, the chief economist at LendingTree. “Then, there are other markets, where only a couple things have gone wrong. For those markets, there’s still hope of a recovery.”

LendingTree crunched the numbers for all 50 states and the District of Columbia to find the healthiest and least healthy housing markets, based on five key criteria: debt-to-income ratio, unemployment, home ownership, negative equity and the average loan-to-value ratio.

It’s worth noting that all of the top 10 have home prices that are below the national average of $298,000, most of them well below that mark.

Geographically speaking, more than half of the top 10 states came from the central time zone, while two came from New England and there were one each from the Mountain and Pacific Time Zones. Still, the top 10 only make up a small part of the overall U.S. market – 8.15% to be exact. By comparison, the bottom 10 make up nearly 36%. California, alone, accounts for nearly 23%.

Here are the top 10 states with the healthiest housing markets.

By Cindy PermanPosted 12 Apr 2011


10. Indiana

Debt as percent of income: 15%Unemployment rate: 8.8%Home ownership: 71.2%Negative equity: 28.5%Average home price: $152,000Loan as percent of home value: 69.4%Percent of U.S. Market: 0.74%Home prices here are half the national average of $298,000 and among the lowest in the top 10. Indiana scored well on debt as a percentage of income, which was 15%, compared to the national average of 27%. It has a high percent of home ownership at 71.2%, compared to the national average of 64.6%. Though, they
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Debt as percent of income: 15%
Unemployment rate: 8.8%
Home ownership: 71.2%
Negative equity: 28.5%
Average home price: $152,000
Loan as percent of home value: 69.4%
Percent of U.S. Market: 0.74%

Home prices here are half the national average of $298,000 and among the lowest in the top 10. Indiana scored well on debt as a percentage of income, which was 15%, compared to the national average of 27%. It has a high percent of home ownership at 71.2%, compared to the national average of 64.6%. Though, they have the highest unemployment rate in the top 10 at 8.8%, which is equal to the national average.


9. Texas

Debt as percent of income: 16%Unemployment rate: 8.2%Home ownership: 65.3%Negative equity: 30.6%Average home price: $183,000Loan as percent of home value: 68.8%Percent of U.S. Market: 4.84%Texas is the largest housing market in the top 10, accounting for 4.84% of the U.S. market. The state scored well on debt as a percent of income, which was 16%, compared to the national average of 27%. Unemployment is 8.2 %, which is below the national average but it’s the second highest unemployment rate in t
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Debt as percent of income: 16%
Unemployment rate: 8.2%
Home ownership: 65.3%
Negative equity: 30.6%
Average home price: $183,000
Loan as percent of home value: 68.8%
Percent of U.S. Market: 4.84%

Texas is the largest housing market in the top 10, accounting for 4.84% of the U.S. market. The state scored well on debt as a percent of income, which was 16%, compared to the national average of 27%. Unemployment is 8.2 %, which is below the national average but it’s the second highest unemployment rate in the top 10 after Indiana.


8. Nebraska

Debt as percent of income: 15%Unemployment rate: 4.3%Home ownership: 70.4%Negative equity: 46.5%Average home price: $160,000Loan as percent of home value: 72.3%Percent of U.S. Market: 0.28%Nebraska has two big hits against it, Findlay notes: It has the worst negative equity in the top 10 at 46.5%, compared to the national average of 35%, plus its loan as a percent of home value is higher than the national average. Offsetting those items, however, are the fact that they have a low unemployment ra
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Debt as percent of income: 15%
Unemployment rate: 4.3%
Home ownership: 70.4%
Negative equity: 46.5%
Average home price: $160,000
Loan as percent of home value: 72.3%
Percent of U.S. Market: 0.28%

Nebraska has two big hits against it, Findlay notes: It has the worst negative equity in the top 10 at 46.5%, compared to the national average of 35%, plus its loan as a percent of home value is higher than the national average. Offsetting those items, however, are the fact that they have a low unemployment rate at 4.3% and very low debt as a percent of income (15%, vs. the national average of 27%).


7. Alaska

Debt as percent of income: 17%Unemployment rate: 7.6%Home ownership: 65.7%Negative equity: 17.3%Average home price: $269,000Loan as percent of home value: 66.3%Percent of U.S. Market: 0.2%Alaska has the most expensive home prices in the top 10 at $269,000, yet debt as a percent of income is just 17%, compared to the national average of 27%. Plus, the state had the best negative equity rating of the top 10 at just 17.3%, compared to the national average of 35%. “They’re probably in the best shape
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Debt as percent of income: 17%
Unemployment rate: 7.6%
Home ownership: 65.7%
Negative equity: 17.3%
Average home price: $269,000
Loan as percent of home value: 66.3%
Percent of U.S. Market: 0.2%

Alaska has the most expensive home prices in the top 10 at $269,000, yet debt as a percent of income is just 17%, compared to the national average of 27%. Plus, the state had the best negative equity rating of the top 10 at just 17.3%, compared to the national average of 35%. “They’re probably in the best shape of anyone in the country,” Findlay said. However, he pointed out that the state accounts for just 0.2% of the U.S. housing market.


6. Wyoming

Debt as percent of income: 18%Unemployment rate: 6.2%Home ownership: 73.4%Negative equity: 23%Average home price: $228,000Loan as percent of home value: 64.2%Percent of U.S. Market: 0.06%Wyoming has one of the highest home ownership rates in the top 10 at 73.4%, even though it has the fourth most expensive real estate in the top 10. Unemployment is low and negative equity is just 23%, compared to the national average of 35%.
Photo: Diane Cook and Len Jenshel | Image Bank | Getty Images

Debt as percent of income: 18%
Unemployment rate: 6.2%
Home ownership: 73.4%
Negative equity: 23%
Average home price: $228,000
Loan as percent of home value: 64.2%
Percent of U.S. Market: 0.06%

Wyoming has one of the highest home ownership rates in the top 10 at 73.4%, even though it has the fourth most expensive real estate in the top 10. Unemployment is low and negative equity is just 23%, compared to the national average of 35%.


5. Iowa

Debt as percent of income: 13%Unemployment rate: 6.1%Home ownership: 71.1%Negative equity: 42.9%Average home price: $152,000Loan as percent of home value: 66.7%Percent of U.S. Market: 0.42%Iowa has some of the lowest real estate prices in the top 10. But it has one of the highest rates of negative equity in the top 10, which is probably what kept them from ranking higher on the list, Findlay said. Other than that, it has the best debt as a percent of income on the list at 13% and it has a low un
Photo: Thinkstock | Comstock Images | Getty Images

Debt as percent of income: 13%
Unemployment rate: 6.1%
Home ownership: 71.1%
Negative equity: 42.9%
Average home price: $152,000
Loan as percent of home value: 66.7%
Percent of U.S. Market: 0.42%

Iowa has some of the lowest real estate prices in the top 10. But it has one of the highest rates of negative equity in the top 10, which is probably what kept them from ranking higher on the list, Findlay said. Other than that, it has the best debt as a percent of income on the list at 13% and it has a low unemployment rate. “They just missed out on taking the gold!” Findlay quipped.


4. Maine

Debt as percent of income: 17%Unemployment rate: 7.5%Home ownership: 73.8%Negative equity: 30.1%Average home price: $210,000Loan as percent of home value: 58.6%Percent of U.S. Market: 0.11%Debt as a percent of income is pretty low in Maine, and the loan as a percent of home value is the lowest in the top 10. They have the second-highest home ownership rate in the top 10. The average home price is $210,000, compared to the national average of $298,000.
Photo: David McLain | Getty Images

Debt as percent of income: 17%
Unemployment rate: 7.5%
Home ownership: 73.8%
Negative equity: 30.1%
Average home price: $210,000
Loan as percent of home value: 58.6%
Percent of U.S. Market: 0.11%

Debt as a percent of income is pretty low in Maine, and the loan as a percent of home value is the lowest in the top 10. They have the second-highest home ownership rate in the top 10. The average home price is $210,000, compared to the national average of $298,000.

3. New Hampshire

Debt as percent of income: 18%Unemployment rate: 5.4%Home ownership: 74.9%Negative equity: 25.2%Average home price: $243,000Loan as percent of home value: 69.8%Percent of U.S. Market: 0.42%New Hampshire has a very low unemployment rate at 5.4%, compared to the national rate of 8.8%, which helped the state keep its debt as a percent of income to just 18%. There’s a high percentage of home ownership here and the average home price is below the national average of $298,000.
Photo: Denis Tangney Jr | Getty Images

Debt as percent of income: 18%
Unemployment rate: 5.4%
Home ownership: 74.9%
Negative equity: 25.2%
Average home price: $243,000
Loan as percent of home value: 69.8%
Percent of U.S. Market: 0.42%

New Hampshire has a very low unemployment rate at 5.4%, compared to the national rate of 8.8%, which helped the state keep its debt as a percent of income to just 18%. There’s a high percentage of home ownership here and the average home price is below the national average of $298,000.


2. Minnesota

Debt as percent of income: 17%Unemployment rate: 6.7%Home ownership: 72.6%Negative equity: 22.2%Average home price: $224,000Loan as percent of home value: 65.6%Percent of U.S. Market: 1.01%The low rate of unemployment is what really stands out with Minnesota, Findlay said, at 6.7% compared to the U.S. rate of 8.8%. Negative equity was among the best at just 22.2% and debt as a percent of income is just 17%.
Photo: Anne Rippy | Photographer's Choice | Getty Images

Debt as percent of income: 17%
Unemployment rate: 6.7%
Home ownership: 72.6%
Negative equity: 22.2%
Average home price: $224,000
Loan as percent of home value: 65.6%
Percent of U.S. Market: 1.01%

The low rate of unemployment is what really stands out with Minnesota, Findlay said, at 6.7% compared to the U.S. rate of 8.8%. Negative equity was among the best at just 22.2% and debt as a percent of income is just 17%.


1. North Dakota

Debt as percent of income: 14%Unemployment rate: 3.7%Home ownership: 67.1%Negative equity: 37.7%Average home price: $173,000Loan as percent of home value: 60.1%Percent of U.S. Market: 0.07%And the healthiest real-estate market in the U.S. is … North Dakota! “There’s a very low cost of ownership there and a very low unemployment rate, which is a huge factor for them,” Findlay said. They have a low cost of living, the unemployment rate is less than half the national average at just 3.7% and debt t
Photo: Richard Cummins | Robert Harding World Imagery | Getty Images

Debt as percent of income: 14%
Unemployment rate: 3.7%
Home ownership: 67.1%
Negative equity: 37.7%
Average home price: $173,000
Loan as percent of home value: 60.1%
Percent of U.S. Market: 0.07%

And the healthiest real-estate market in the U.S. is … North Dakota! “There’s a very low cost of ownership there and a very low unemployment rate, which is a huge factor for them,” Findlay said. They have a low cost of living, the unemployment rate is less than half the national average at just 3.7% and debt to income is the one of the best on the list at just 14%. Real estate prices are pretty inexpensive here, with the average home price at $173,000, compared to the national average of $298,000.