If the United States enters a recession and housing prices stagnate or fall, homeowners in parts of California, Delaware, Illinois, Indiana and New Jersey are most at risk of owing more than their houses are worth or losing their homes to foreclosure, according to a new analysis.
ATTOM, a real estate data company, identified the most at-risk counties based on affordability, foreclosure filings, unemployment levels and the share of homes with mortgage balances exceeding property values. On average, counties where Black and Hispanic residents are the largest group were judged to be at least twice as vulnerable to housing market declines as counties where White residents are the largest group, according to a Stateline analysis of census and ATTOM data.
The Federal Reserve’s effort to curb inflation by raising interest rates is expected to cool the red-hot housing market—but not immediately. For now, there is still strong demand for the limited supply of houses and apartments, and unemployment remains low. Most experts expect housing prices to continue to rise this year.
