New York City and Chicago Areas Most Exposed to Market Downturns; Southern and Midwestern Regions Show Lower Risk

New York City and Chicago Areas More Exposed to Market Downturns; At-Risk Locations Have Weaker Affordability, Foreclosure, Underwater and Job Numbers; Lower Risk Again Mainly Spread Across Southern and Midwestern Regions

In a recent report released by ATTOM, a leading curator of land, property, and real estate data, it was revealed that certain areas in the United States are more vulnerable to market downturns than others. The report, which focused on county-level housing markets, highlighted the higher concentrations of at-risk markets in California, New Jersey, and Illinois, with significant clusters in the New York City and Chicago areas.

The analysis, based on home affordability, underwater mortgages, foreclosures, and unemployment rates in the fourth quarter of 2023, showed that California, New Jersey, and Illinois had 34 of the 50 most vulnerable counties in the country. These areas continue to face challenges related to unaffordable home ownership costs and high mortgage interest rates.

Specifically, the New York City and Chicago metropolitan areas, along with inland California, were identified as having the highest risk of potential market drop-offs. In contrast, the Southern and Midwestern regions of the country had a lower risk of market declines.

Rob Barber, CEO of ATTOM, emphasized that the report is not a warning sign for homeowners to panic but rather a tool to highlight areas that may be more exposed to market falls. The analysis considered factors such as the percentage of homes facing foreclosure, underwater mortgages, affordability of major home ownership expenses, and local unemployment rates.

The report also noted that the national median home price remained flat in the summer of 2023 but dropped by 3 percent in the fall. This decline, coupled with high home affordability costs, raised concerns about the sustainability of the 12-year housing market boom.

Overall, the findings of the report underscore the ongoing disparities in the housing market across the country and the need for homeowners and policymakers to be aware of potential risks in certain areas. As the market continues to evolve, it is essential to monitor key indicators and trends to make informed decisions about buying and selling property.