Revealed – US counties most vulnerable to housing market collapse


Teta expounded on the continuing threat of the virus: “The US housing market keeps powering on despite of the coronavirus pandemic that’s still raging across the country,” he said. “Indeed, home prices keep rising in part because of the crisis. Nevertheless, the virus remains a potent threat to the broader economy and the housing market, with some of the same counties we’ve seen in the past continuing to look vulnerable to potential downturns. No immediate warning signs hang over any one part of the country, but pockets are more vulnerable to the market taking a turn for the worse.”

The most vulnerable counties named

  • The report differs from others given the granular nature of its research. Information was drawn from among 575 counties with enough data to be included in the report. To wit:
  • Eight counties in Chicago and its suburbs made the top 50 list. They were: Cook, DeKalb, DuPage, Kane, Kendall, Lake, McHenry and Will.
  • An equal number of most-vulnerable counties were found in the New York City metropolitan area, primarily in neighboring New Jersey where Bergen, Essex, Hunterdon, Middlesex, Ocean, Passaic and Sussex were found to be highly susceptible. Also in New Jersey, but counted as part of the Philadelphia region, were Burlington, Camden and Gloucester among the at-risk areas. Rockland County in New York also made the list.
  • In the same part of the country, Kent and Sussex counties also made the vulnerable list in the fourth quarter.
  • California also figured prominently, with seven counties in the top 50 list: Butte County (Chico), El Dorado County (east of Sacramento), Humboldt County (Eureka) and Shasta County (Redding) in the northern part of the state; as well as Kern County (Bakersfield), Madera County (outside Fresno) and Riverside County (east of Los Angeles) in the central and southern sections of the state.
  • Florida posted three among the top 50: Bay County (Panama City), Flagler County (Palm Coast) and Lake County (outside Orlando). 

Common threads: Unaffordable housing, underwater mortgages, foreclosures

Counties most at risk were found to have higher levels of unaffordable housing, underwater mortgages, and foreclosures, according to the ATTOM report. In those areas, major home ownership costs (mortgage payments, property taxes and insurance) on median-priced single-family homes consumed more than 30% of average local wages in 32 of the 50 counties that were most vulnerable to market problems connected to the virus pandemic in the fourth quarter of 2021. The highest percentages in those markets were in Rockland County, New York (outside New York City, 57.9% of average local wages needed for major ownership costs); El Dorado County, California, east of Sacramento, (with 52.5%); Riverside County, California, east of Los Angeles (52%); Bergen County, New Jersey, (47.6%) and Passaic County, New Jersey, (44.7%). Nationwide, the data showed major expenses on typical homes sold in the fourth quarter required 25.2% of average wages.

The report also showed that at least 10% of residential mortgages were underwater in the third quarter of 2021 (the latest data available on owners owing more than their properties are worth) in 18 of the 50 most at-risk counties. Nationwide, 7.1% of mortgages fell into that category, the findings showed. Those with the highest underwater rates among the 50 most at-risk counties were: Kennebec County in Augusta, Maine, with 29.6% of mortgages underwater; Webb County in Laredo, Texas with 23.3%; Kankakee County, Illinois outside Chicago, with 19%; Saint Clair County, Illinois, outside St. Louis, Missouri with 18.3%; and Cumberland County in Fayetteville, North Carolina with 8.1% of mortgages underwater.

Foreclosures abound after moratorium is lifted

The report found that more than one in 1,500 residential properties faced a foreclosure action in the fourth quarter of 2021 in 36 of the 50 most at-risk counties. Nationwide, one in 2,446 homes were in that position, the data showed. Foreclosure actions have risen over the past few months since the July 31 end of a federal moratorium on lenders taking back properties from homeowners who fell behind on their mortgages during the virus pandemic. The highest rates of post-moratorium foreclosures in the top 50 counties were in Saint Clair County, Illinois outside St. Louis, Missouri, where one in 121 residential properties faced possible foreclosure; Camden County, New Jersey, (one in 606); Sussex County, New Jersey, (one in 709); Cumberland County, New Jersey, (one in 743) and Cook County in Chicago (one in 757).

Least at-risk counties also part of the study mix

The ATTOM research also showcased counties least vulnerable to pandemic-fueled economic erosion, each area spread throughout the South, Midwest and West. Forty-two (42) of the 50 counties least vulnerable to pandemic-related problems from among the 575 included in the fourth-quarter report were in the South, Midwest and West. Just eight were in the Northeast.

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