Markets & Economy

State dependency on oil may increase risk of home-price drops

Home prices are well above historic norms in oil-dependent markets, but that trend may shift in the opposite direction.
  • Major Texas metros may have hit their peak in terms of home prices.
  • The states most at risk for price declines are some of the least populated states in the nation.
  • Volatility within the energy industry will affect the homes sales markets for the next two years.

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Five Texas metros and three states that are oil-dependent remain at a high risk for home price declines over the next two years. According to Arch Mortgage Insurance's latest market review, these at-risk Texas metros include Houston, Dallas, Austin, Fort Worth and San Antonio. "Metropolitan areas tied to the energy industry are seeing home prices well above their historic long-term trends," the market review stated. "This indicates that affordability in that state (Texas) remains a primary concern, and that home price declines could occur." In these Texas markets, home prices have risen year-over-year by at least 7 percent. Houston image via Shutterstock. Houston leads these metros, having seen a 10 percent rise. Dallas (9.4 percent), Fort Worth (7.6 percent), San Antonio (7.6 percent) and Austin (7.1 percent) follow. These price increases have equated to affordability dropping by 4 to 8 percent -- with the exception of San Antonio, where affordability remained ...