Regions at risk for COVID-19 related economic strain

A recent MReport discusses the states that are at risk for economic strain from the COVID-19 pandemic. Even though the housing market has avoided many of the economic effects from the pandemic, unfortunately, there are certain regions that are being impacted more than others. According to ATTOM Data Solutions, Western states are less likely to struggle with COVID-related economic damage. Experts believe that Northeast and East Coast regions were more vulnerable, and therefore have been hit harder than other regions. The report named New York City, Baltimore, Philadelphia, and Washington D.C as cities that are at high risk for economic strain. ATTOM analyzed housing markets all over the United States to make conclusions about their vulnerability and risk levels. Analysts determined the level of risk based on “the number of homes facing possible foreclosure, the portion of homes with mortgage balances that exceed the estimated property value, and the percentage of local wages required to pay for homeownership expenses”. ATTOM concluded that New Jersey, Illinois, California, New York, Florida, and Maryland had 40 of the 50 counties that are at highest risk for economic impact. Seven of the top 50 were in western counties, and a majority of those counties were in northern California. Out of the nine vulnerable midwestern counties, eight of them were in Illinois. Outside of Florida and Maryland, Louisiana was the only southern state with more than two counties in the top 50.

WHAT DOES THIS MEAN FOR THE HOUSING MARKET?

The report notes that while the national housing market has endured the initial pandemic impacts, it is still vulnerable. Todd Teta, Chief Product Officer with ATTOM Data Solution, comments that this new data is not a sign that markets in these regions will suffer from economic strain. It just provides information to gauge the areas that will be at risk if the housing market shifts negatively. Teta believes that the condition of these regions will depend on whether the country can halt the pandemic in the coming months. ATTOM will continue to research and analyze the housing market in 2021 to determine if/how regions will be affected differently. The report includes that the reason many of the top 50 counties are at risk is due to higher rates of unaffordable housing, underwater mortgages, and foreclosure activity.

Click here to read the full MReport and learn more!

Visit ATTOM.com to learn more about the study and data collected.