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recent study conducted by ATTOM has identified several regions across the United States that could be at risk of a housing market downturn. The researchers analyzed various factors such as affordability, underwater mortgages, home equity, foreclosures, and unemployment rates to determine the health of a region's housing market.
The study found that several major metropolitan areas like New York and Chicago are among the most vulnerable due to their high housing density. Additionally, a dozen rapidly growing markets in California were also identified as being at risk.
The factors contributing to a market's vulnerability include rising home prices and property costs like property taxes and homeowners insurance. If these costs continue to increase while home values drop, homeowners could find themselves upside down on their mortgages.
The study identified 51 U.S. counties as being most vulnerable to a downturn, with many of these regions being long-standing "at-risk" areas. The most at-risk counties in New York include Kings County, Richmond County, and Bronx County. In New Jersey, Essex, Passaic, Sussex, and Union counties made the list due to their proximity to New York City. Counties around Chicago that were identified as being vulnerable include Cook, Kendall, McHenry, Will, and Lake County in Indiana.
In California, twelve counties were identified as being at risk, including Butte, Humboldt, Solano, Shasta, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, Riverside, and San Bernardino counties.
Despite these findings, the report suggests that while these regions may be at risk, there is no immediate crisis or warning signs of an impending downturn. However, it is crucial to closely monitor these areas where key indicators suggest a higher likelihood of issues.
On a positive note, the study also identified several regions across the South and Midwest as being least vulnerable to a downturn. Virginia and Wisconsin each had eight counties deemed least vulnerable, while Tennessee had five.
