The latest Housing Risk Report from ATTOM covering the highest risk markets during the second quarter found that 14 were in California, seven were in Florida, five in New Jersey, and four in Louisiana.
ATTOM defined risk by affordability, proportion of seriously underwater mortgages, foreclosures, and county unemployment rates. The second quarter was marked with home prices rising to record highs while mortgage rates, wages, and unemployment rates mostly held steady.
The riskiest counties in the second quarter, according to the report, were Charlotte County, Florida; Humboldt County, California; Shasta County, California; Butte County, California; and Cumberland County, New Jersey. The five counties had unemployment rates above June’s non-seasonally adjusted national average of 4.36% along with ratios where at least one in every 766 homes in the county in foreclosure.
On a nationwide measurement during the second quarter, placing a down payment on a home, paying a mortgage, and covering other expenses cost the typical owner just over a third (33.7%) of their annualized wages. However, the top markets where costs were much higher and even exceeded what a typical worker could cover with a full year’s pay were Marin County, California, with home expenses consuming 119.7% of the typical resident’s annual wages; Santa Cruz County, California, with expenses claiming 116.1% of typical annual wages; Maui County Hawaii, with expenses eating up 111.5% of typical annual wages; Kings County, New York, with expenses snatching 109% of typical annual wages; and San Luis Obispo County, California, with expenses mopping up 99.3% of typical annual wages.
In 19% (111) of the 579 counties with sufficient data to analyze, residents needed to spend at least half of their annualized wages to purchase and maintain a home in the second quarter. In about 63% of the counties, residents had to spend at least one-third of their annual wages on home expenses.
“This summer’s home prices were certainly eye-catching, but there are many factors that contribute to the health of a local housing market,” said Rob Barber, CEO of ATTOM. “Our index takes into account key indicators beyond just sales price to create a barometer that helps folks better understand where their market is headed. There’s uncertainty about how long prices can keep going up, and what will happen with the broader economy. That can be scary for owners and prospective buyers who don’t always get a full view of their market.”
