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‘Storm Clouds’ Gathering Over the Housing Market

The housing markets most vulnerable to impacts from the Coronavirus pandemic tend to be located along the West Coast, clustered around New York, Baltimore, and Washington, D.C., and numerous markets in the Chicago area, according to a special report from ATTOM Data Solutions.

ATTOM assessed 406 counties for the share of homes under threat of foreclosure, the share of underwater homes, and the percentage of local wages necessary to cover “major homeownership expenses.”

In 47 of the 50 most at-risk counties, more than one in 750 homes faced foreclosure in Q1 2020. The highest rate was in Cumberland County, New Jersey, where one in every 180 properties faced a foreclosure filing in Q1.

In 36 of the 50 most at-risk counties, at least 15% of homes with a mortgage owed more than their home was worth as of Q1 2020. In Sussex County, New Jersey, 39% of mortgages were underwater, and in Monroe County, Pennsylvania, 36% were underwater.

In all but seven of the most at-risk counties at least 30% of local wages would be required to cover major homeownership costs, such as a mortgage, insurance, and property taxes. Westchester County, New York, fared the worst with 77.1% of local wages necessary to cover these costs. In Rockland County, New York, and Nassau County, New York, the percentage of wages needed to cover homeownership costs was 71.1% and 63.4%, respectively.

On the other hand, in all 50 of the least vulnerable counties assessed, fewer than one in 750 homes faced a foreclosure action in Q1 2020. Less than 15% of mortgages were underwater in all but one of these counties, and in 19 of the 50 counties homeownership costs required less than 30% of average local wages.

The least vulnerable counties tended to be in Colorado, Oregon, Texas, and Wisconsin.

The 11 counties in the New York City area that ranked in the top 50 most vulnerable counties were: Nassau, Orange, Rockland, Suffolk, and Westchester counties in New York and Bergen, Essex, Hunterdon, Middlesex, Sussex, and Union counties in New Jersey.

The seven Chicago-area counties ranking in the top 50 were Cook; De Kalb; Du Page; Kendall; Lake, McHenry, and Will.

In the D.C. metro area, Prince George’s; Frederick; Spotsylvania, and Stafford counties ranked in the 50 most vulnerable.

Four counties in Maryland made the vulnerable list: Baltimore; Carroll; Cecil, and Harford counties. Also, five of Connecticut’s eight counties were listed in the top 50, including Litchfield; Middlesex; New Haven; Tolland, and Windham counties.

ATTOM’s analysis reveals “pockets around the country that appear more or less poised to withstand downward pressure on prices and other market conditions,” said Todd Teta, Chief Product Officer at ATTOM Data Solutions.

While data in the coming months will give a clearer picture, Teta said we are already seeing signs of abating home price gains.

“Home-sales data from around the country is starting to show that eight years of price gains may be coming to an end amid the economic damage flowing from the virus pandemic,” Teta said. “It’s still too early to make any definitive calls, but the latest numbers show storm clouds gathering over the market.”

About Author: Krista F. Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.

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