There is nothing inherently good about housing price increases. In fact, federal policies from Fannie Mae and Freddie Mac to low interest rates created by the Federal Reserve have manipulated the American housing market for years. There are also zoning and other local government regulations at play especially on the West Coast.
However, to at least some extent, rising housing prices are caused by housing demand. Housing demand is mostly caused by economic growth. Interestingly, during 2014, New Mexico’s housing market saw the second-lowest appreciation of housing prices during 2014 as shown in the chart below (check the data below the map for all of 2014 while the map is just the final quarter of last year):
Is New Mexico’s weak economy helping to prevent a second housing boom or will New Mexicans be unable to move to other states because they can’t get a decent price for their current home? Slow growth in housing values relative to other states is definitely another sign that our State’s economy remained weak in 2014.