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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 60 October 2024 J O U R N A L AT-RISK COUNTIES EXPERIENCING HIGHER UNEMPLOYMENT RATES, FORECLOSURES, AND MORE I n Q2 2024, ATTOM produced a Special Housing Risk Report highlighting county-level housing markets across the country that are more or less susceptible to falls based on home affordability, underwater mortgages, and other metrics. According to the analysis, the most at-risk markets in the nation are—once again—concentrated in California, New Jersey, and Illinois, with some of the largest clusters located in inland California and the New York City and Chicago regions. Less susceptible markets were still mostly found in the Midwest and the South. Based on differences in home affordability, underwater mortgages, foreclosures, and unemployment, the second-quarter patterns showed that over half of the counties in the United States thought to be most vulnerable to possible drop-offs were in California, New Jersey, and Illinois. These concen- trations topped the list of regions more vulnerable to downturns, just as they have over the past few years. That list of county-level housing markets included seven in the New York City region, five in the Chicago metropol- itan area, and twelve in parts of Califor- nia, largely in the state's interior distant from the Pacific coast. The remainder were dispersed mostly throughout the Midwest and Northeast, as well as the South. Conversely, over 50% of the mar- kets deemed least likely to fall occurred in Virginia, Tennessee, and Wisconsin. There were six in the Washington, D.C., region and three in each in the metro ar- eas of Richmond, Virginia, and Nashville, Tennesse. "The housing market boom continues to gain momentum, thanks to another Springtime boost. However, some markets show signs of potential instability, which suggests a mixed level of risk, particularly in certain regions that repeatedly show Default Servicing signs of concern," said Rob Barber, CEO of ATTOM. "While these observations don't indicate immediate red flags or warning signs of an impending downturn, they do highlight areas of relative risk. With the housing market still facing challenges, it's crucial to closely monitor regions where key indicators suggest a higher likelihood of issues." Based on the share of homes facing potential foreclosure, the share of mortgage balances exceeding estimat- ed property values, the percentage of average local wages needed to cover major homeownership expenses on median-priced single-family homes, and the local unemployment rate, counties were deemed to be mostly at risk. These findings came from an examination of the most current ATTOM-prepared in- formation on home equity, affordability, and foreclosure. The federal government provided the unemployment rates. In Q2 of 2024, rankings were determined by combining those four criteria across 589 U.S. coun- ties that had enough data available for analysis. Each category's counties were ordered from lowest to highest, and the result was determined by combining the four positions. Important risk disparities persisted in several U.S. regions in the second quarter of 2024, even though im- portant housing market indicators have improved or worsened this year. These metrics included affordability, equity, and home prices. At-Risk Counties Have Higher Unemployment, Underwater Mortgages, Foreclosures, & Affordability In Q2 2024, 24 out of the 51 most at-risk U.S. counties were deemed most vulnerable to housing market issues. These counties included large portions of California and the urban centers around New York and Chicago. The counties were among 589 in the country having sufficient data for analysis. The most at-risk counties included three in New York City (Kings County, which covers Brooklyn, Richmond County, which covers Staten Island, and Bronx County) and four in the New York City suburbs (Essex, Passaic, Sussex, and