Lending markets

These are the 10 states with the most stable housing markets in America

The three most important things in real estate: location, location, location. And the US real estate market is in a weird spot right now.

Mortgage rates are almost double what they were a year ago, reflecting the Federal Reserve’s campaign to contain inflation. But they’ve also been volatile, including sharp week-to-week declines.

Home prices remain stuck at historic highs with bidding wars reported in some places, even as the inventory of homes for sale begins to grow and housing markets across the country, including some of the most important states below, begin to cool.

Where is it all going? Realtor.com recently revised its 2022 provide, now calling for a 6.7% drop in sales this year. Forecasters previously predicted a 6.6% increase. But even if the new forecast is confirmed, it would still be the second-biggest year for sales since 2007, behind only last year.

As always, some states will fare better than others. Because businesses consider the local housing market in their location decisions, CNBC’s America’s Top States for Business study assesses the health of each state’s housing market as part of the broader economic category, which is worth 13% of a state’s overall score under this year’s methodology. The housing measure takes into account year-over-year price appreciation, new construction by year, and foreclosures and insolvency in the first quarter.

Looking for a safe place to get out of a possible real estate storm? These ten states are the most stable.

10. South Dakota

Deadwood, South Dakota

John Elek | The image bank | Getty Images

A strong economy in the The Mount Rushmore State has steadily rising prices. Foreclosure activity is very low, but a growing level of underwater mortgage lending could portend cracks below the surface.

Economic ranking 2022: No. 12 (Top States Grade: B-)

Appreciation: 20.1%

Housing starts per 1,000 inhabitants: 8.8

Seizure rate: 1 dwelling out of 17,724

Underwater mortgages: 4.8%

9. South Carolina

Contractors work on the roof of a house under construction in the Stillpointe subdivision in Sumter, South Carolina, Tuesday, July 6, 2021.

Green Micah | Bloomberg | Getty Images

Inventory is always historically tight with bidding wars still common in many South Carolina markets and prices continue to rise steadily. But new construction is booming and the stress on existing loans is under control.

Economic ranking 2022: No. 13 (tie) (Top States Grade: B-)

Appreciation: 21.4%

Housing starts per 1,000 inhabitants: 9.5

Seizure rate: 1 dwelling out of 1,081

Underwater mortgages: 3.4%

8.Arizona

A worker builds a new house in a housing estate in Phoenix, Arizona.

Justin Sullivan | Getty Images

Prices are rising here more than in any other state. But new construction is also booming, which helps to facilitate Stock crisis in Arizona. Rising foreclosures are a potential cause for concern, but home equity is strong.

Economic ranking 2022: No. 22 (tie) (Top States Grade: C-)

Appreciation: 27.4%

Housing starts per 1,000 inhabitants: 9

Seizure rate: 1 dwelling in 1,861

Underwater mortgages: 1.4%

7. Vermont

A traditional Vermont home.

Gerard Sioen | Getty Images

Green Mountain State continues to benefit from new residents seeking refuge in major cities. House prices are rising at a healthy pace and mortgages are more than healthy. However, new construction is not keeping pace, and the overall economy of Vermont is slow.

Economic ranking 2022: No. 33 (Top States Grade: D+)

Appreciation: 20%

Housing starts per 1,000 inhabitants: 3.2

Seizure rate: 1 dwelling in 13,930

Underwater mortgages: 1.1%

6. Tennessee

A house in Nashville, Tennessee.

Isabel Pino | Universal Image Group | Getty Images

5.Idaho

A ‘New Homes’ sign near the Copper River Basin CBH Homes community in Nampa, Idaho on October 19, 2021.

Kyle Green | Bloomberg | Getty Images

4.Texas

A residential neighborhood in Austin, Texas on Sunday, May 22, 2022.

Jordan Vondehaar | Bloomberg | Getty Images

Texas’ demographic gains are helping to fuel a real estate boom, but one that isn’t spiraling out of control. New homes for these new residents are growing rapidly and home equity is good.

Economic ranking 2022: No. 8 (Top States Grade: A-)

Appreciation: 19.3%

Housing starts per 1,000 inhabitants: 8.9

Seizure rate: 1 out of 2,326 dwellings

Underwater mortgages: 2.5%

3. Florida

Single family home available sign in St. Cloud, Florida.

Jeff Greenberg | Universal Image Group | Getty Images

There is almost only sun and light in The Florida real estate market. Prices are jumping, but so are construction crews. Rising foreclosure rates in a state known for its boom and bust cycles could be a cloud on the horizon.

Economic ranking 2022: No. 4 (Top States Grade: A)

Appreciation: 25.7%

Housing starts per 1,000 inhabitants: 9.6

Seizure rate: 1 dwelling in 1,211

Underwater mortgages: 1.4%

2.Washington

A “For Sale” sign is posted outside of a residential home in the Queen Anne neighborhood of Seattle, Washington on May 14, 2021.

Karen Ducey | Reuters

1.Utah

A worker uses a Volvo AB excavator to build a road during residential construction in Saratoga Springs, Utah.

George Frey | Bloomberg | Getty Images

No matter how you look at it, the housing market in the Beehive State is booming. Prices are rising at the second highest rate in the nation, but with the nation’s fastest pace of construction, plenty of new inventory is on the way in Utah. Foreclosures are manageable and home equity is strong in the nation’s premier housing market.

Economic ranking 2022: No. 6 (Top States Grade: A)

Appreciation: 27.1%

Housing starts per 1,000 inhabitants: 12.2

Seizure rate: 1 dwelling out of 2,063

Underwater mortgages: 1.4%

Data sources: CNBC America’s Top States for Business study, Federal Housing Finance Agency, US Census Bureau, ATTOM Data Solutions.