These are the 10 states with America’s most stable housing markets

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

Mortgage rates are nearly double what they were a year ago, reflecting the Federal Reserve’s campaign to rein in inflation. But they have also been volatile, including some sharp declines from week to week.

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 biggest in the states below, begin to cool.

Where is everything heading? Realtor.com recently revised its 2022 forecast, now calling for sales to decline by 6.7% this year. Forecasters previously called for a 6.6% increase. But even if the new forecast holds true, it would still be the second biggest sales year since 2007, only trailing last year.

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

Looking for a safe place to ride out a potential housing storm? These ten states are the most stable.

A solid economy in the Mount Rushmore State has prices rising steadily. Foreclosure activity is very low, but a rising level of underwater mortgages could foreshadow some cracks below the surface.

2022 Economy Rank: No. 12 (Top States Grade: B-)

Appreciation: 20.1%

Starts per 1,000 population: 8.8

Foreclosure rate: 1 in 17,724 housing units

Underwater mortgages: 4.8%

Inventory is still historically tight with bidding wars still common in many South Carolina markets, and prices still steadily increasing. But new construction is surging and stress on existing loans is under control.

2022 Economy Rank: No. 13 (tie) (Top States Grade: B-)

Appreciation: 21.4%

Starts per 1,000 population: 9.5

Foreclosure rate: 1 in 1,081 housing units

Underwater mortgages: 3.4%

Prices are surging here more than any other state. But new construction is booming too, helping to ease Arizona‘s inventory crunch. Rising foreclosures are a potential cause for concern, but home equity is solid.

2022 Economy Rank: No. 22 (tie) (Top States Grade: C-)

Appreciation: 27.4%

Starts per 1,000 population: 9

Foreclosure rate: 1 in 1,861 housing…