Which Housing Markets Are Getting Hit Worst By COVID?

ATTOM released its second-quarter 2021 Coronavirus Report spotlighting county-level housing markets around the United States that are more or less vulnerable to the impact of the ongoing Coronavirus pandemic, still endangering the U.S. economy. The report shows that states along the East Coast, as well as Illinois, were most at risk in the second quarter of 2021 – with clusters in New Jersey, Delaware, the Chicago area and central Florida – while the West remained far less exposed.

But the 50 most at-risk counties around the U.S. were spread over a wider area than in the first quarter of 2021, as most states had no more than two counties in the top group in the most recent time period.

The report reveals that Florida, New Jersey, other East Coast states and Illinois had 37 of the 50 counties most exposed to the potential economic impact of the pandemic in the second quarter of 2021. They included seven counties in the Chicago metropolitan area, four near New York City, all three in Delaware and four in central Florida.

However, only Florida, New Jersey, Illinois, Louisiana and Delaware had more than two counties in the top 50, compared to eight states in the first quarter of 2021. The top 50 were scattered across 18 states in the second quarter, compared to 15 the prior time period.

The only three western counties in the top 50 during the second quarter of this year were in northern California and southern Arizona.

Markets were considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded the estimated property value and the percentage of average local wages required to pay for major home ownership expenses on median-priced houses or condominiums. The conclusions are drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Rankings were based on a combination of those three categories in 564 counties around the United States with sufficient data to analyze in first and second quarters of 2021. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the three ranks. See below for the full methodology.

The findings follow a year when the national housing market continued its decade-long boom even amid the pandemic, with median single-family home prices rising more than 10 percent across much of the country. While small indicators of a possible slowdown have emerged in 2021 in the form of declining home affordability and slumping investor activity, fuel for further price gains has come from the pandemic receding, employment growing and the broader economy improving.

Still, the pandemic remains a threat to the economy and the housing market as new virus variants appear and clusters of virus cases continue to plague pockets of the country.  

“The Coronavirus pandemic is easing, and the U.S. economy is gradually coming back to life, which suggests that the nation’s housing market will indeed escape any major damage from the crisis. No major signs are showing anything different at this point. Nevertheless, the pandemic is still out there and remains a potent threat to home sales and values, as well as to the broader economy,” said Todd Teta, chief product officer with ATTOM. “Amid a generally upbeat outlook, we continue to see areas that appear more at risk for a fall, especially in specific areas of the East Coast and Midwest. As we have throughout the pandemic, we will keep a close eye on those areas in case the situation worsens and the pandemic surges again.”

Most vulnerable counties clustered around Chicago, New York City, Delaware and central Florida

Eighteen of the 50 U.S. counties most vulnerable in the second quarter of 2021 to housing market troubles connected to the pandemic (from among the 564 counties with enough data to be included in the report) were in metropolitan areas around New York, NY, and Chicago, IL, as well in Delaware and central Florida.

They included seven that cover Chicago (Cook County) and its suburbs (De Kalb, Kane, Kendall, Lake, McHenry and Will counties) and four in the New York City metropolitan area (Ocean, Passaic and Sussex counties in New Jersey and Orange County in New York). The four in central Florida were Highlands County (Sebring), Indian River (Vero Beach), Lake County (outside Orlando) and Osceola County (Kissimmee).

All three Delaware counties – New Castle (Wilmington), Kent (Dover) and Sussex (Georgetown) – made the top 50 list as well in the second quarter of 2021.

Additional counties in Florida, New Jersey and Illinois also made the top-50 list. Those in Florida were Bay County (Panama City), Clay County (outside Jacksonville) and Marion County (Ocala), FL, while those in New Jersey included Atlantic County (Atlantic City), Cumberland County (Vineland), Gloucester County (outside Philadelphia, PA), Mercer County (Trenton) and Warren County (near Allentown, PA). Others in Illinois were Kankakee County, Madison County (outside St. Louis, MO), Saint Clair County (outside St. Louis, MO) and Tazewell County (outside Peoria).

In addition, Louisiana had three counties in the top 50 during the second quarter – Bossier Parish (Shreveport), Livingston Parish (outside Baton Rouge) and Tangipahoa Parish (north of New Orleans).

The only western counties among the top 50 most at risk from problems connected to the Coronavirus outbreak in the second quarter of 2021 were Butte County (Chico), CA; Humboldt County (Eureka), CA and Mohave County, AZ (outside Las Vegas, NV).

Higher levels of unaffordable housing, underwater mortgages and foreclosure continue to appear in most-at-risk counties

Major home ownership costs (mortgage payments, property taxes and insurance) on median-priced single-family homes consumed more than 30 percent of average local wages in 23 of the 50 counties that were most vulnerable to market problems connected to the virus pandemic in the second quarter of 2021.

At least 15 percent of mortgages were underwater in the first quarter of 2021 (the latest data available on owners owing more than their properties are worth) in 33 of the 50 most at-risk counties. Nationwide, 10 percent of mortgages fell into that category. Those with the highest underwater rates among the 50 most at-risk counties were Saint Clair County (outside St. Louis, MO) (43.6 percent of mortgages underwater); Delaware County, PA (outside Philadelphia) (36.4 percent); Muscogee County (Columbus), GA (29 percent); Monroe County (Stroudsburg), PA (28.2 percent) and Kankakee County, IL (27.1 percent).

More than one in 2,500 residential properties faced a foreclosure action in the second quarter of 2021 in 40 of the 50 most at-risk counties. Nationwide, one in 4,046 homes were in that position. (Foreclosure actions have dropped about 80 percent over the past year amid a federal moratorium on lenders taking back properties from homeowners behind on their mortgages during the virus pandemic.) The highest rates in the top 50 counties were in Gloucester County, NJ (outside Philadelphia) (one in 747 residential properties facing possible foreclosure); Cumberland County (Vineland) NJ (one in 773); Tazewell County, IL (outside Peoria) (one in 905); Tangipahoa Parish (north of New Orleans) (one in 1,129) and Ocean County (Toms River), NJ (one in 1,336).

Counties least at-risk concentrated in South and Midwest

Thirty-six of the 50 counties least vulnerable to pandemic-related problems from among the 564 included in the second-quarter report were in the South and Midwest.

Texas had 13 of the 50 least at-risk counties, including five in the Dallas metropolitan area (Collin, Dallas, Denton, Ellis and Tarrant counties) and two in the Austin metro area (Travis and Williamson counties). Minnesota had five, including four in the Minneapolis metro area (Dakota, Hennepin, Ramsey and Scott counties).

Others among the top-50 least at-risk counties with a population of 500,000 or more included Harris County (Houston), TX; Middlesex County, MA (outside Boston); Salt Lake County (Salt Lake City), UT; Macomb County, MI (outside Detroit) and Suffolk County (Boston), MA.

Less-vulnerable counties again have lower levels of unaffordable housing, underwater mortgages and foreclosure activity

Major home ownership costs (mortgage, property taxes and insurance) on the median-priced single-family home consumed less than 30 percent of average local wages in 44 of the 50 counties that were least at-risk from market problems connected to the virus pandemic in the second quarter of 2021.

More than 15 percent of mortgages were underwater in the first quarter of 2021 (with owners owing more than their properties are worth) in none of the 50 least at-risk counties. Those with the lowest rates in those counties were Washington County, WI (outside Milwaukee) (1.9 percent underwater); Chittenden County (Burlington), VT (2.9 percent); Salt Lake County (Salt Lake City), UT (3.6 percent); Dallas County, TX (3.7 percent) and Tarrant County (Fort Worth), TX (4.1 percent).

More than one in 2,500 residential properties faced a foreclosure action in the second quarter of 2021 in none of the 50 least at-risk counties. Those with the lowest rates in those counties included Missoula County, MT (no residential properties facing possible foreclosure); Chittenden County (Burlington), VT (one in 69,734); Olmstead County (Rochester), MN (one in 65,380); Davidson County (Nashville), TN (one in 44,624) and Rutherford County (Murfreesboro), TN (one in 39,564).