Housing risk is once again becoming a hot-topic of late as interest rates and home prices are still going up. Knowing this, ATTOM Data has released a new study entitled Special Housing Risk Report which spotlights county-level housing markets that are more or less vulnerable to declines. This number is based on home affordability, foreclosures, and other measures recorded during the fourth quarter of 2022.
Overall, California, Illinois, New Jersey, and Delaware were found to have the most at-risk markets throughout the country with Chicago and New York City standing in the front of the crowd.
According to ATTOM, fourth-quarter patterns found that New Jersey, Illinois, and California had 31 of the 50 counties most vulnerable to potential declines around the U.S. That was roughly the same as the 28 more-at-risk markets that were in those states in the third quarter of last year.
During a time when the broader U.S. housing market boom stalled, those concentrations dwarfed other parts of the country.
The 50 most at-risk included seven in the Chicago metropolitan area, five in and around New York City, three in or near Cleveland, OH, and 13 spread through northern, central, and southern California. The rest were clustered mainly in other parts of the East Coast, including two of the three counties in Delaware.
Outside of these clusters, the South, Midwest, and other western states outside of California have continued to have the largest share of markets considered by ATTOM to be the least resistant to falling housing markets.
"With the U.S. housing market cooling off considerably since the middle of last year, some areas of the country continue to show signs of being more at risk of a larger downturn than others. That's based on several key factors that can either boost or damage local housing markets, including unusually high home ownership costs, foreclosures, and relatively weak homeowner equity," said Rob Barber, CEO at ATTOM. "It remains important to note that we are not identifying markets headed for an imminent fall, just those that look to be more exposed to market troubles. Heading into the peak buying season of 2023, we will keep monitoring those areas closely to see if anything changes."
Click here to view the report in its entirety.