Affordability remains one of the largest hurdles the housing market faces, and no state struggles more than California.
A new report from Attom found 16 of the 50 highest risk markets — those more vulnerable to declines in home affordability, equity and other measures — were in California, followed by nine in New Jersey, four in Florida and three in each Arizona and Texas.
Despite little seller leverage, home prices have
"A lot of attention has, deservedly, gone to affordability concerns stemming from the rising price of homes," Attom CEO Rob Barber said in a press release Thursday. "But what really separated the riskiest markets in our third quarter assessment were their high rates of foreclosures and unemployment."
Attom determined risk levels through four measurements: affordability, proportion of seriously underwater mortgages, foreclosure rates and county unemployment rates.
"If a community is losing jobs, those homeowners will find it harder to pay their monthly mortgage bills," Barber said. "That means more foreclosures, which can hurt the broader local housing market."
The purchase and monthly costs of a median priced home accounted for at least half of the typical county resident's annual wages in nearly 20% of the 580 counties with sufficient data to analyze. A median priced home required at least a third of the typical resident's wages in 63.1% of counties as well, the report showed.
But a recent report from First American expects
Which counties were the riskiest and healthiest?
Four of the top five counties with the riskiest housing markets were in California, including Butte, Humboldt, Shasta and El Dorado counties. Charlotte County, Florida, slotted in at third in Attom's rankings.
All five posted unemployment rates above 5% and at least one foreclosure in every 806 homes last quarter.
Seven of the 50 least risky counties were in Wisconsin, five were in Tennessee and four each were in Montana, New Hampshire and Virginia.
But the least risky county in the country was Berkeley County in West Virginia, followed by Chittenden County, Vermont, Erie County, New York, Olmsted County, Minnesota, and Albany County, New York. All five recorded unemployment rates at or below 4% and a foreclosure rate of, at most, one in every 2,624 properties.
The least affordable counties based on the report were Kings County in New York and Santa Cruz County and Marin County in California, all of which saw median home expenses totaling more than 100% of the typical American's wage.
Nationally, 2.8% of homes were seriously underwater last quarter, with Louisiana counties being the center of the worst underwater rates in the country. Of the 50 counties with the highest seriously underwater rates, 14 were in Louisiana. The state also accounted for the entire top five, all hovering above 13%.
One out of every 1,402 homes nationwide were in foreclosure in the third quarter, with 16 of the top 50 counties with the highest prevalence of foreclosures coming from Florida, followed by five in New Jersey. Dorchester County, South Carolina, Kaufman County, Texas, and Osceola County, Florida, had the worst foreclosure rates with at least one foreclosure in every 449 homes.
California was again the hardest hit state for unemployment rates. Imperial County ranked last in the county at 20.3%, while Tulare County (11.3%), Merced County (10.4%) and Kings County (9.8) also finished in the bottom five. The national unemployment rate was 4.2% in July, according to the Bureau of Labor Statistics.
