These 3 Housing Markets at Highest Risk of COVID-Related Downturn, Says ATTOM Report

Some housing markets are at higher risk of a downturn than others in the United States, as homeowners owe more on their homes than they are worth, and incomes are used to pay a higher percentage of housing costs. (iStock)

Three states have housing markets at highest risk of downturn due to COVID-19 pandemic, according to a new report from ATTOM Data Solutions.

New Jersey, Illinois and California had the highest concentrations of risky markets in the fourth quarter of 2021, according to the report. The largest clusters of risk areas also remain in the New York and Chicago areas. Outside of California, no other western county was in the top 50 considered most at risk.

“The U.S. housing market continues to turn despite the coronavirus pandemic still raging across the country. Indeed, home prices continue to rise in part due to the crisis,” said Todd Teta, chief product officer. at ATTOM. “Nevertheless, the virus remains a potent threat to the broader economy and housing market, with some of the same counties we’ve seen in the past continuing to look vulnerable to potential downturns. There are no immediate warning signs hanging over part of the country, but the pockets are more vulnerable to market deterioration.”

Refinancing your mortgage could help lower your monthly payments and make them more manageable. Use Credible’s free online tool to research different mortgage refinance lenders and see what your loan options are.


Homes are at risk of foreclosure on risky markets

ATTOM’s report says its risk measure was based on the percentage of homes facing a possible foreclosure process. In the most at-risk areas, there were more homes in which mortgage balances exceeded estimated property values. The company said it also considered the percentage of local salaries required to pay for major property expenses.

At least 10% of residential mortgages in the third quarter of 2021 were underwater, meaning homeowners owed more on the home than it was worth. This creates a higher risk because if a homeowner falls into financial difficulty, they will likely be unable to sell their home. About one in 1,500 homes faced foreclosure action in the fourth quarter of 2021 in 36 of the highest-risk counties, according to the report. This is compared to an average of one in 2,446 households nationwide.

“Foreclosure actions have increased in recent months since the end of a federal moratorium on lenders repossessing properties from homeowners who fell behind on their mortgages during the virus pandemic,” the report said. “The moratorium ended on July 31 and foreclosures are expected to increase over the coming year.”

If you’re at risk of foreclosure, refinancing your home loan can help reduce your monthly expenses and get your finances back on track. You can explore your mortgage refinance options in minutes by visiting Credible to compare rates and lenders. Check out Credible and get prequalified today.


What you can do if you face a foreclosure

Several options are available to landlords that could help them avoid foreclosure proceedings, including government-sponsored programs in place for those struggling due to the COVID-19 pandemic:

Enter mortgage forbearance

Homeowners who have mortgages backed by Fannie Mae and Freddie Mac have the option of obtaining COVID-19 mortgage relief to avoid eviction or mortgage foreclosure. If they have been financially impacted by the virus, they can contact their mortgage agent to opt out. Once the forbearance period is over, borrowers will have several options for repaying the money, including paying it off in one lump sum, loan modifications to repay it in installments, or adding it to the end of the loan.

Refinance your mortgage

Mortgage rates are currently hovering in the upper 3% range, according to the latest data by Freddie Mac. Homeowners who want to reduce their mortgage payment can refinance at a lower mortgage rate. Visit Credible to request a refinance in minutes and see how much you could save.

Sell ​​your house

House prices are rising at record rates – growing 15% annually, according to financial services firm CoreLogic. While this can put a strain on buyers looking to enter the market, it can be beneficial for homeowners. Homeowners can tap into the equity in their home through a cash refinance.

If you’re facing foreclosure and want to learn more about options for refinancing your home loan, visit Credible to speak with a home loan expert and get all your questions answered. Credible can help you compare mortgage lenders and discover the best refinance rates available today so you can lower your monthly payments and reach your financial goals.

Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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