Property data curator ATTOM released a Special Housing Risk Report spotlighting county-level housing markets that are more or less vulnerable to declines, based on home affordability, underwater mortgages and other measures in the second quarter of 2024.
The report shows that California, New Jersey and Illinois once again had the highest concentrations of the most-at-risk markets in the country, with some of the biggest clusters in the New York City and Chicago areas, as well as inland California. Less-vulnerable markets remained spread mainly throughout the South, along with parts of the Midwest.
The second-quarter patterns revealed that nearly half of the counties around the U.S. considered most exposed to potential drop-offs were in California, New Jersey and Illinois. As with earlier periods over the past few years, those concentrations dominated the list of areas more at risk of downturns.
County-level housing markets on that list included seven in around New York City, five in the Chicago metro area and 12 in areas of California mostly away from the Pacific coast. The rest were scattered largely around the South as well as other parts of the Midwest and Northeast.
At the other end of the risk spectrum, close to half the markets considered least likely to decline fell in Virginia, Wisconsin and Tennessee. They included four in the Washington, D.C., area and three each in the Richmond, Va., and Nashville, Tenn., metro areas.
“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,” Rob Barber, CEO of ATTOM, said in a release. “While these observations don’t indicate immediate red flags or warning signs of an impending downturn, they do highlight areas of relative risk. With the housing market still facing challenges, it’s crucial to closely monitor regions where key indicators suggest a higher likelihood of issues.”
Counties were considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes and local unemployment rates.
The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Unemployment rates came from federal government data. Rankings were based on a combination of those four categories in 589 counties around the United
States with sufficient data to analyze in the second quarter of 2024. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the four ranks.
Significant gaps in risk continued in different parts of the U.S. during the second quarter of 2024 as key housing market metrics have gotten either better or worse this year. Those measures included home prices, equity and affordability.
The metropolitan areas around New York and Chicago as well as broad stretches of California, had 24 of the 51 U.S. counties considered most vulnerable in the second quarter of 2024 to housing market troubles. The report includes 51 counties at either end of the risk spectrum, instead of the usual 50 that have been included in prior reports, because of ties in rankings.
The most at-risk counties included three in New York City (Kings County, which covers Brooklyn, Richmond County, which covers Staten Island, and Bronx County) and four in the New York City suburbs (Essex, Passaic, Sussex and Union counties, all in New Jersey). It also included Cook, Kendall, McHenry and Will counties in Illinois and Lake County in Indiana.
Another 12 were in California: Butte County (Chico), Humboldt County (Eureka), Solano County (outside Sacramento) and Shasta County (Redding) in the northern part of the state, plus Kern County (Bakersfield), Kings County (outside Fresno), Madera County (outside Fresno), Merced County, San Joaquin County (Stockton) and Stanislaus County (Modesto) in central California. Two others, Riverside and San Bernardino counties, were in southern California.