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11 Journal average local wages needed for major ownership costs) » Richmond County (Staten Island), New York (63.3% of average local wages needed for major ownership costs) » New York County (Manhattan), New York (60.6% of average local wages needed for major ownership costs) At least 7% of residential mortgages were underwater in Q3 of 2022 in 28 of the 50 most at-risk counties. Nationwide, 5.7% of mortgages fell into that category, with home- owners owing more on their mortgages than the estimated value of their properties. ose with the highest underwater rates among the 50 most at-risk counties were: » Peoria County, Illinois (16.8% underwater) » Tangipahoa Parish, Louisiana (outside New Orleans) (15.7% underwater) » Saint Clair County, Illinois (outside St. Louis) (15.1% underwater) » Kankakee County, Illinois (outside Chicago) (14.8% underwater) » Philadelphia County, Pennsylvania (14.5% underwater) More than one of every 1,000 residential properties faced a foreclosure action in Q3 of 2022 in 45 of the 50 most at-risk counties. Nationwide, one in 1,517 homes was in that position. (Foreclosure actions have risen since the expiration in July 2021 of a federal mor- atorium on lenders taking back properties from homeowners who fell behind on their mortgages during the early part of the coro- navirus pandemic that hit in 2020. Roughly twice as many foreclosure cases were open in the third quarter of 2022 compared to the same period in 2021.) e highest foreclo- sure rates in the top 50 counties were in: » De Kalb County, Illinois (outside Chicago) (one in 289 residential properties facing possible foreclosure) » Peoria County, Illinois (one in 326 residential properties facing possible foreclosure) » Sussex County, New Jersey (outside New York City) (one in 410 residential properties facing possible foreclosure) » Cumberland County, New Jersey (one in 433 residential properties facing possible foreclosure) » Will County, Illinois (one in 457 residential properties facing possible foreclosure) PENDING HOME SALES DIP FOR FIFTH CONSECUTIVE MONTH Pending home sales slid for the fifth consecutive month in October, according to the National Association of Realtors (NAR), down 4.6% from September 2022's reported findings, as three of four U.S. regions record- ed month-over-month decreases, and all four regions recorded year-over-year declines in transactions. NAR defines a pending home sale as a sale listed as pending when the contract has been signed, but the transaction has not closed, though the sale usually is finalized within one or two months of signing. NAR's Pending Home Sales Index (PHSI) sank 4.6% to 77.1 in October 2022, while year over year, pending transactions slipped by 37%. According to NAR, a PHSI reading of 100 is equal to the level of contract activity in 2001. "October was a difficult month for home buyers as they faced 20-year-high mortgage rates," NAR Chief Economist Lawrence Yun said. "e West region, in particular, suffered from the combination of high interest rates and expensive home prices. Only the Mid- west squeaked out a gain." Freddie Mac reported on October 27 that the 30-year fixed-rate mortgage (FRM) sur- passed the 7% mark when it averaged 7.08%. "October was a tough month for home buyers, as mortgage rates hit the highest level in over two decades," First American Deputy Chief Economist Odeta Kushi said. "How- ever, mortgage applications data thus far in November point to home buyers returning to the market as rates have recently slipped from their peaks in October." Regionally, pending sales in three of the nation's four regions dropped off, as the Northeast PHSI sank 4.3% in October month-over-month to 68.7, a year-over-year fall of 29.5% from October 2021. e South PHSI dropped 6.4% to 90.6 in October, falling 38.2% from the prior year. e West Index slipped by 11.3% in October to 55.6, sinking 46.2% from October 2021. e only region showing PHSI gains in October was the Midwest which rose 3.3% to 83.5 in Oc- tober, a decrease of 32.1% from one year ago. e correlation between the dip in sales and affordability continues, as high rates, inflationary concerns, and high prices have forced many to reconsider a home purchase in the current market. "Since October, mortgage rates have subsided, dropping half a percentage point from their recent peak of 7.08%," Realtor. com Economic Data Analyst Hannah Jones said. "Still, at the current, below-peak, rate of 6.58%, financing 80% of a median-priced home purchase would mean a monthly pay- ment roughly $900 higher than just one year ago. is reprieve in mortgage rates may be short-lived depending on upcoming inflation data. e Fed remains committed to their 2% inflation target, meaning more rate hikes are likely, though the magnitude of the hikes will depend on incoming CPI data." As the Federal Reserve continues to make adjustments to curb the nation's inflationary concerns, the ripple effects on the mortgage market have resulted in a dip in rates over the past few weeks and a rise in mortgage application volume. e Mortgage Bankers Association (MBA) reported that overall mortgage application volume was up 2.2% week over week, as Freddie Mac reported that the 30-year FRM dropped to 6.58%. Jones added, "Typically, as the weather cools off from summer highs, so do home prices. In October, prices were down almost $25,000 from the summer's peak, though still up compared to last year. Buyers who are able to contend with higher rates may enjoy more inventory, more price reductions, and less competition for the remainder of the season. Homeowners hoping to sell before the year is up may have to exercise flexibility in negotia- tions to keep buyers interested." Are there signs of life being pumped back into the housing market after several months of decline?