North Dakota and Texas have the highest risk that home prices will decline among all states, because of their reliance on the oil industry, according to Arch Mortgage Insurance.
North Dakota has a risk of home price decline of 38%, followed by Texas at 32%, according to the summer edition of Arch's
North Dakota is especially vulnerable because it's seen unusually rapid home price appreciation over recent years, Arch said. Further, nonfarm employment in North Dakota has fallen by 1.8% over the past three months, the most-rapid decline of any state during that period.
Texas also remains vulnerable as its home prices are the second-most overvalued in the nation, relative to incomes.
Both North Dakota and Texas are at risk of home price declines if oil and gas prices "on the outside change that energy prices fall materially from here," Ralph DeFranco, Arch's senior director of risk analytics and pricing, said in a news release.
