IRVINE, Calif. — A new report has identified the cities with the highest number of underwater mortgages, as well as the safest and the riskiest housing markets.
The data was released as part of ATTOM’s latest Housing Risk Report, which is based on athird-quarter analysis from the real estate data firm and which evaluates county-level housing markets nationwide based on affordability, home equity, foreclosure activity and other indicators.
The report comes as the national median home price hit a record $375,000 during the quarter.
ATTOM said it found that 2.8% of homes were seriously underwater — defined as having loan balances at least 25% higher than the property’s estimated market value, or a loan-to-value ratio of 125% or more.
Louisiana Leads in Underwater Mortgages
According to ATTOM, Louisiana continued to post some of the nation’s highest concentrations of seriously underwater properties. Fourteen of the 50 counties with the worst rates were in the state, followed by Illinois with six, Pennsylvania with five and Arkansas with four.
“Softening home prices, easing buyer demand and lower incomes all contribute to a higher concentration of underwater mortgages in the South compared to other regions,” Hannah Jones, senior economic research analyst at Realtor.com, said in a report published by that company. “As prices and demand weaken, homeowners have a harder time selling and may find themselves struggling to keep up with mortgage payments.”
Highest Local Rates
ATTOM found the highest local rates in Louisiana included:
- Calcasieu Parish: 17.1%
- Rapides Parish: 15.4%
- Ouachita Parish: 13.6%
- East Baton Rouge Parish: 13.1%
- Tangipahoa Parish: 13.1%
Louisiana’s median list price in October was $275,750, according to Realtor.com.
Jones said high concentrations of underwater mortgages pose risks including reduced mobility, greater chances of delinquency or default, and deferred home maintenance — issues that can ultimately weigh on neighborhood conditions and property values.
California Ranked Riskiest Housing Market
Despite the South’s challenges, California emerged as the nation’s riskiest housing market overall based on ATTOM’s composite risk score, which considers affordability, foreclosure activity, unemployment and the share of underwater loans.
Sixteen of the 50 highest-risk counties were in California. New Jersey followed with nine; Florida with four; and Arizona and Texas with three each.
According to ATTOM, the top five riskiest counties were:
- Butte County, Calif.
- Humboldt County, Calif.
- Charlotte County, Fla.
- Shasta County, Calif.
- El Dorado County, Calif.
Each reported unemployment of at least 5.1% and foreclosure rates of at least one filing for every 806 homes. Realtor.com recently gave California an “F” in both homebuilding and affordability in its national housing report card, the company said.
Wisconsin, Tennessee Among Safest Markets
On the other end of the spectrum, Wisconsin led the country with the greatest number of least risky housing markets. Of the 50 counties with the lowest overall risk, seven were in Wisconsin. Tennessee had five, while Montana, New Hampshire and Virginia each had four.
The five safest counties in ATTOM’s assessment were:
- Berkeley County, W.Va.
- Chittenden County, Vt.
- Erie County, N.Y.
- Olmsted County, Minn.
- Albany County, N.Y.
All reported unemployment rates at or below 4% and foreclosure levels no worse than one in several hundred homes, the company said.
