IRVINE, CA — ATTOM has released its Special Housing Risk Report for the second quarter of 2024, presenting a comprehensive analysis of the housing market’s vulnerability across the United States. The report identifies the regions most susceptible to potential declines, with a detailed assessment based on home affordability, underwater mortgages, foreclosures, and unemployment rates.
The analysis highlights that California, New Jersey, and Illinois have the highest concentrations of at-risk markets. Particularly, areas surrounding New York City and Chicago, as well as inland California, are noted for their susceptibility. These regions represent nearly half of the counties most at risk nationwide, continuing a trend observed over recent years.
Among these vulnerable regions, the New York City area includes Kings County (Brooklyn), Richmond County (Staten Island), and Bronx County, alongside suburban areas in New Jersey such as Essex, Passaic, Sussex, and Union counties. In the Chicago metro area, Cook, Kendall, McHenry, and Will counties in Illinois, along with Lake County in Indiana, are highlighted. California’s at-risk counties include Butte, Humboldt, Solano, and Shasta in the north, and Kern, Kings, Madera, Merced, San Joaquin, and Stanislaus in the central region. Southern California’s Riverside and San Bernardino counties are also on the list.
Conversely, less-vulnerable markets are predominantly found in Virginia, Wisconsin, and Tennessee. These include the Washington, DC, area and the Richmond and Nashville metro regions. “The housing market boom continues to gain momentum, thanks to another Springtime boost. However, some markets show signs of potential instability, which suggests a mixed level of risk, particularly in certain regions that repeatedly show signs of concern,” stated Rob Barber, CEO of ATTOM. “While these observations don’t indicate immediate red flags or warning signs of an impending downturn, they do highlight areas of relative risk.”
The report evaluates risk using several factors. Home affordability, defined by the percentage of local wages needed for major home expenses, exceeds 43% in many at-risk counties, compared to the national average of 35.1%. High rates of underwater mortgages, where homeowners owe more than their property’s value, are prevalent in 34 of the 51 most at-risk counties. Foreclosure actions are notably higher in these areas, with more than one in every 1,000 properties affected in 39 counties. Unemployment rates also remain a concern, with at least 5% in 35 of the most vulnerable counties, exceeding the national average of 4.1%.
In contrast, the least vulnerable counties exhibit affordability for major homeownership costs, with many requiring less than 30% of average local wages. Underwater mortgage rates are significantly lower, and foreclosure actions are rare. Notably, counties such as Chittenden in Vermont and Williamson in Tennessee show robust market conditions with low unemployment rates.
This report serves as a critical resource for home buyers and sellers, providing insights into market conditions and potential risks. By understanding these regional vulnerabilities, stakeholders can make informed decisions about property investments and market strategies. As the housing market evolves, continuous monitoring and analysis will be essential in navigating these dynamic conditions.
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