Mortgage Bankers Association's (MBA) latest chart shows that the dropping oil prices will have a possible impact on housing markets. It will lessen employment rates and will make it tough for many potential consumers to purchase residential properties.
According to Housingwire, MBA's January 2015 chart showed a dipping trend in employment rates across the United States. Among its biggest effects is affordability of residential properties which would be tough without a steady source of income. And to compound the problem, oil prices this week have seen decreasing prices as global demand dipped to all-time lows. One of the most affected countries is China, with oil rates reduced to below $30 a barrel which is a 12-year low.
On Wednesday, over-all stocks officially welcomed a bear market. MBA also added that the prices were over $100 a barrel in the middle of 2014. Stockholders are dealing with their worst start to a calendar year of the stock market. In North Dakota, they have the biggest decline in employment with more than 3 percent of the population having a hard time looking for a job or are under qualified.
Employment rates in Colorado and Texas increased by 1 percent in November of last year while Oklahoma and Louisiana were down to less than 0.5 percent; all these data were presented in the chart. The MBA noted that from a real estate standpoint, dropping energy prices is both good and bad news for housing markets. Any signs of slowing home sales, declining home prices, and rising delinquencies in either the single-family or commercial/multifamily markets should be monitored within these areas.
Meanwhile in a report by CNN Money, Lawrence Yun, chief economist at the National Association of Realtors said that "Fewer jobs means less home buying demand and that will naturally soften the housing markets in those job-impacted areas."
On the other hand, lower energy rates keep more cash in people's pockets and will increase spending power. But for states with secured economies in the energy sector, lower oil, gas and coal prices can bring layoffs, belt-tightening and less demand for housing.