DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1496135
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 78 J O U R N A L April 2023 LARGE CITIES MOST VULNERABLE TO DECLINES H ousing 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 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 af- fordability, foreclosures, and other measures recorded during Q4 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 at 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 concen- trations 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, Ohio, 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 down- turn than others. That's based on several key factors that can either boost or damage local housing markets, including unusually high homeownership 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." HOME EQUITY GAINS EXPERIENCE SIGNIFICANT DECLINE FROM Q1 2022 C oreLogic has released the Homeown- er Equity Report (HER) for Q4 of 2022, showing that U.S. homeowners with mortgages—which account for roughly 63% of all properties—saw equity increase by 7.3% year over year. This represents a collective gain of $1 trillion for an average of $14,300 per borrower since Q4 of 2021. As U.S. home price growth continued its slow, steady decline in the final months of 2022, home equity trends naturally followed suit. In Q4 2022, the average borrower earned about $14,300 in equity year over year, com- pared with the $63,100 gain seen in Q1 2022. Four Western states and one district post- ed annual home equity decreases: » Idaho (-$21,400) » Washington (-$18,900) » California (-$8,500) » Utah (-$4,600) » Washington, D.C. (-$8,300) This partially mirrors trends recorded in CoreLogic's latest Home Price Index (HPI), which found that Idaho, Washington, and Washington, D.C., saw home price growth decline slightly year over year in January 2023. Meanwhile, Florida homeowners saw the highest annual equity growth in the fourth quarter, at $49,000. Florida has posted the largest year-over-year home price gains in the country for the past year, according to HPI data, with prices up by 13.4% in January. "While equity gains contracted in late 2022 due to home price declines in some re- gions, U.S. homeowners on average still have about $270,000 in equity more than they had at the onset of the pandemic," said Selma Hepp, Chief Economist at CoreLogic. "Even in Idaho, where borrowers were the most vulnerable to losses, the typical homeowner with a mortgage still has about $250,000 in