Mortgage

Housing risk intensifying in the East, Midwest and California

Housing risk intensifying in the East, Midwest and California
Written by Publishing Team

Despite the high demand for homes and relatively low levels of distress due to Government relief application as a result of the epidemicThe pressure on some local markets seems unrelenting.

By the end of 2021, the counties most vulnerable to housing pressure remained concentrated in pockets of the East Coast, parts of the Midwest and California, despite some minor changes over the past half year, according to Atom’s latest quarterly report.

To get an idea of ​​how entrenched some of the distress is, consider that a country with a relatively high concentration of countries in the ranks of the most vulnerable 250, such as Florida, had 32 in that category in the fourth quarter, which was close to the number Registered in the middle of the year (31). Similarly, the number of Californians increased slightly to 27 from 26 in the same period. To be sure, some numbers in the states where the severity is concentrated have actually fallen. Illinois saw the number of counties drop to 16 from 19, but the change was generally limited.

Todd Tita, chief product and technology officer at Atom, said in an email.

Atom ranks the most vulnerable counties based on three factors: affordability, concentration of foreclosures and underwater properties.

To get a sense of the gap in distress between the country’s most vulnerable and other counties, consider that in 36 of the 50 at-risk counties, one out of 1,500 residential properties faced foreclosure in the last quarter of 2021. By comparison, within the state as a whole, it was There is only one drug out of 2,446 that has been foreclosed on.

Whereas underwater properties – those with values ​​below the debt on the property – are rare National rise in housing pricesIn some weak markets they are plentiful. In the particularly extreme case of Madison County in Mississippi, nearly two-thirds, or 13,033 of the 19,775 foreclosed properties are underwater, according to Atom data.

However, Madison is lower on the list (172) because it has fewer foreclosures than some other counties (0.016%) and is more affordable – housing spending overall is 28.9% of income. In the most vulnerable county (Sussex, New Jersey), the foreclosure rate is much higher at 0.141%. There, people use 38.5% of their income to buy a home and about 9% of the loans are underwater.

It remains to be seen if these areas improve or worsen in their plight. Currently, Atom expects to see them stay on track, but he foresees more problems if the pandemic or inflation worsens.

“There are a myriad of changing forces…continue to hover over the housing market and the broader US economy that could raise or lower risk levels from one county to another,” Tita said. “As they have for most of the past year, these forces include the trajectory of mortgage rates, inflation, the stock market, and the pandemic.”

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