New Jersey, Illinois, Delaware, and inland California continued to have the highest concentrations of the most-at-risk markets in the country, with the biggest clusters in the New York City, Chicago and Philadelphia areas, according to ATTOM’s Special Housing Risk Report for Q3 2022.
The report found that the 50 most at-risk counties included three in New York City, five in the New York City suburbs, seven in the Chicago metro area and four in the Philadelphia metro area. Another 11 counties were scattered along other parts of the Mid-Atlantic region, including the other two in Delaware and three in New Jersey.
Key highlights:
- California had nine counties in the top 50 list: Butte County, Humboldt and Shasta County in the north; Madera County , Merced County, Stanislaus County and Tulare County in central California; and Kern and Riverside County in the south.
- Major home ownership costs on median-priced single-family homes consumed more than one-third of average local wages in 33 of the 50 counties that were most vulnerable. The highest percentages were in Kings County, New York (106.1%); Rockland County, New York (75.6%); Riverside County, California (63.8%); Richmond County, New York (63.3%) and New York County, New York (60.6%).
- At least 7% of residential mortgages were underwater in 28 of the 50 most at-risk counties. Those with the highest underwater rates were Peoria County, Illinois (16.8%); Tangipahoa Parish, Louisiana (15.7%); Saint Clair County, Illinois (15.1%); Kankakee County, Illinois (14.8 %) and Philadelphia County, Pennsylvania (14.5%).
- More than one of every 1,000 residential properties faced a foreclosure action in 45 of the 50 most at-risk counties. Nationwide, one in 1,517 homes were in that position. The highest foreclosure rates in the top 50 counties were in De Kalb County, Illinois (one in 289); Peoria County (one in 326); Sussex County, New Jersey (one in 410); Cumberland County, New Jersey (one in 433) and Will County, Illinois (one in 457).
- The August 2022 unemployment rate was at least 5% in 23 of the 50 most at-risk counties. The highest levels were in Tulare County, California (8%); Kings County (7.1%); Winnebago County, Illinois (6.8%); Merced County, California (6.8%) and Kern County, California (6.7%).
- Twenty-one of the 52 counties least vulnerable to housing-market problems from among the 581 included in the third-quarter report were in the South, while another 15 were in the Midwest. Just eight were in the West and eight were in the Northeast.
- Tennessee again had six of the 52 least at-risk counties, including four in the Nashville metropolitan area, while Minnesota had five.
- Other counties least at-risk included four in Wisconsin: Brown County, Dane County, Eau Claire County and La Crosse County. New Hampshire also had four – Hillsborough, Merrimack, Rockingham and Strafford.
- Aside from Hennepin County, Minnesota, counties with a population of at least 500,000 that were among the 52 least at-risk included King County, Washington; Santa Clara County, California; Middlesex County, Massachusetts and Travis County, Texas.
Major takeaway:
On the other end of the spectrum, ATTOM stated that the “least-vulnerable counties continue to have more-affordable homes along with lower levels of underwater mortgages, foreclosure activity and unemployment.”
The report found that major home ownership costs consumed more than one-third of average local wages in 29 of the 52 counties that were least vulnerable, with the lowest%age in Morgan County, Alabama at 20.4%. Also, less than 5% of residential mortgages were underwater in 42 of the 52 least-at-risk counties, with the lowest rate in Chittenden County, Vermont at 1.2%. More than one in 1,000 residential properties faced foreclosure action in zero of the 52 least at-risk counties as well, with the lowest rate in Chittenden County at zero. Lastly, the unemployment rate was less than 3% in 45 of the 52 least-at-risk counties,with the lowest rate in Chittenden County at 1.6%.
“As the prospect of a possible recession hangs over the U.S. economy, counties in three of the seven largest metropolitan areas – New York City, Chicago, and Philadelphia – are among the most vulnerable to a potential downturn in their housing markets,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “These counties, and many more in Central California share a number of traits – poor affordability, relatively high unemployment and foreclosure rates, and homeowners who are underwater on their loans – which could spell trouble if the economy takes a turn for the worse.”
For the full report, click here.
