LOS ANGELES — Issuers in California and Texas accounted for more than one-third of S&P Global's public finance ratings upgrades last year.

California and Texas, which also led last year for states with the most upgrades, saw a combined total of 346 of the 1,004 S&P upgrades to municipal bond credits, according to a report released by the rating agency Monday. California led all states with 245 upgrades, while Texas had 101.

"Robust economic conditions and real estate markets spurred positive rating movement, though there were some exceptions," S&P analysts wrote Monday. "State ratings moved negatively, more than positively, from economic factors, a circumstance that is counter to the nation's seven-year expansion."

The states that rely heavily on the energy sector experienced downgrades related to economic conditions, according to analysts.

The rating agency downgraded 801 credits last year.

S&P expects U.S. gross domestic product in 2017 to be 2.4%, up from the 1.6% it anticipates for 2016 when final data are available. In most cases, analysts said that state real gross domestic product was a reliable indicator of economic rating changes among states.

Single-family home prices are expected to increase 3.7% in 2017, and even more in California and Texas, which accounted for almost all the upgrades for improving real estate markets in 2016.

Upgrades for economic reasons and real estate values were mostly concentrated in California, Florida and Texas, according to the report.

Thirty-four states and U.S. territories had more upgrades than downgrades in 2016, while 16 states, one commonwealth, and one U.S. territory had more downgrades. Two states had the same number of upgrades and downgrades, and two others had no rating changes in the year.

North Dakota and West Virginia, which combined had 35 economic downgrades, experienced a 7.9% decrease in real state GDP in 2016 and a 2.1% decrease, respectively. Each is expected to have slight GDP growth in 2017.

Ten states experienced changes to their general obligation ratings. Hawaii's GOs were upgraded from AA to AA-plus and Tennessee's to AAA from AA-plus. Alaska, Connecticut, Illinois, Kansas, New Jersey, New Mexico, North Dakota and West Virginia were downgraded.

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