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MReport December 2022

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M REPORT | 47 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA spectrum, the South, Midwest, and Western areas outside California had the highest con- centration of markets considered least vulnerable to falling housing markets. Counties were considered more or less at-risk based on the per- centage of homes facing possible foreclosure, mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major homeownership expenses on median-priced single-family homes, and local unemploy- ment rates. The conclusions were drawn from an analysis of the most recent home affordability, equity, and foreclosure reports prepared by ATTOM. The ongoing wide disparities in risk throughout the country remained in place at a time when the overall U.S. housing market had one of its weakest third- quarter performances in the past decade. Key measures for the period running from July through September of 2022 showed the national median home value de- creasing by 3%, home-seller profits declining, foreclosures doubling, compared to the same period in 2021, and mortgage lending plum- meting to its lowest level in three years. All of that happened as the 30-year fixed-rate mortgage (FRM) climbed close to 7%, inflation re- mained at a 40-year high, and the stock market fell. Each of those forces cut into what home buyers could afford. ATTOM's analysis found that 28 of the 50 U.S. counties consid- ered most vulnerable in Q 3 2022 to housing market troubles (from among 581 counties with enough data to be included in the report) were in the metropolitan areas around Chicago; New York, New York; and Philadelphia, as well as in California. Golden State mar- kets on the list remained mostly inland, away from the coast. The 50 most at-risk counties included three in New York City (Kings, New York, and Richmond counties, which cover Brooklyn, Manhattan, and Staten Island), five in the New York City sub- urbs (Essex, Passaic, Sussex, and Union counties in New Jersey and Rockland County in New York) and seven in the Chicago metropolitan area (Cook, De Kalb, Kane, Kendall, Lake, McHenry, and Will counties, all in Illinois). The four in the Philadelphia metro area that were among the top 50 in the third quarter were Philadelphia County; Gloucester County, New Jersey; New Castle County, Delaware; and Cecil County, Maryland. Nine California counties popu- lated the top 50 list, including: • Butte County (outside Sacramento) • Humboldt County (Eureka) • Shasta County (Redding) • Madera County (outside Fresno) • Merced County (outside Modesto) • Stanislaus County (Modesto) • Tulare County (outside Fresno) • Kern County (Bakersfield) • Riverside County (southern part of California) Major homeownership costs (mortgage payments, property taxes, and insurance) on median- priced single-family homes consumed more than one-third of average local wages in 33 of the 50 counties that were most vulner- able to market problems in Q 3 2022. The highest percentages in those markets were in: • Kings County, New York (Brooklyn): 106.1% of average local wages needed for major ownership costs • Rockland County, New York: 75.6% of average local wages needed for major ownership costs • Riverside County, California: 63.8% of average local wages needed for major ownership costs • Richmond County (Staten Island), New York: 63.3% of average local wages needed for major ownership costs • New York County (Manhattan), New York: 60.6% of average local wages needed for major ownership costs At least 7% of residential mort- gages were underwater in Q 3 2022 in 28 of the 50 most at-risk counties. Nationwide, 5.7% of mortgages fell into that category, with homeowners owing more on their mortgages than the es- timated value of their properties. Those with the highest under- water rates among the 50 most at-risk counties were: • Peoria County, Illinois: 16.8% underwater • Tangipahoa Parish, Louisiana (outside New Orleans): 15.7% underwater • Saint Clair County, Illinois (outside St. Louis): 15.1% under- water • Kankakee County, Illinois (out- side Chicago): 14.8% underwater • Philadelphia County, Pennsylvania: 14.5% underwater More than one of every 1,000 residential properties faced a foreclosure action in Q 3 2022 in 45 of the 50 most at-risk coun- ties. Nationwide, one in 1,517 homes was in that position. (Foreclosure actions have risen since the expiration in July 2021 of a federal moratorium on lend- ers taking back properties from homeowners who fell behind on their mortgages during the early part of the coronavirus pandemic that hit in 2020. Roughly twice as many foreclosure cases were open in the third quarter of 2022 compared to the same period in 2021.) The highest foreclosure rates in the top 50 counties were in: • De Kalb County, Illinois (outside Chicago): one in 289 residential properties facing possible foreclosure • Peoria County, Illinois: one in 326 residential properties facing possible foreclosure • Sussex County, New Jersey (outside New York City): one in 410 residential properties fac- ing possible foreclosure • Cumberland County, New Jersey: one in 433 residential properties facing possible foreclosure • Will County, Illinois: one in 457 residential properties facing possible foreclosure Major homeownership costs (mortgage payments, property taxes, and insurance) on median- priced single-family homes consumed more than one-third of average local wages in 33 of the 50 counties that were most vulnerable to market problems in Q3 2022.

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