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Housing prices near NYC, Chicago most vulnerable to downturn

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The area around New York City and Chicago is among the most vulnerable to falling home prices during the current slowdown in the US housing market, according to a new study released Thursday.

Of the 50 counties in the United States, nine of the counties with the highest potential for price declines are located in or near New York City. Real estate data company Atom.

Another six counties at risk are near the Chicago metropolitan area, and 13 counties are scattered throughout California.

Attom’s report is based on analysis of four categories: home foreclosure data, home affordability levels, number of “underwater” homeowners whose remaining mortgage balance exceeds their property value, and geography. unemployment rate.

Categories were used to create a composite ranking of 575 counties nationwide for which sufficient data were available. The lowest ranked counties, such as counties around New York City, were considered “at risk” of recession.

The Federal Reserve’s attempt to tighten monetary policy in response to decades of high inflation has also played a key role in the recent housing market downturn.

Two of New York’s nine most endangered counties are in the city.
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new york city
The number of homes under contract has plummeted recently in Manhattan.
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Mortgage rates climbed above 6% this week for the first time since 2008, pushing many homebuyers to the sidelines and hampering demand until conditions improve.

“Given the little progress so far in curbing inflation, it seems increasingly likely that the Fed’s actions will push the economy into recession, and if that happens, Some housing markets will be more vulnerable than others.Executive Vice President of Market Intelligence at Atom.

New York has two of the most endangered counties in the city, Kings and Richmond. Kings County includes Brooklyn and Richmond County includes Staten Island.

The remaining six counties (Bergen, Essex, Ocean, Passaic, Sussex, and Union) are in New Jersey, and the seventh is Rockland County in New York.

Chicago
Chicago-area counties are also at risk of a slowdown.
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The company noted that sales of both existing and new homes are declining as homeowners react to the surge in mortgage rates.Fed rate hikes have a direct impact on mortgages No, but interest rates typically rise during periods of policy tightening based on expectations that borrowing will become more expensive.

bloomberg First reported data.

Inflation is also near a 40-year high, posing an affordability crisis for buyers who also have to factor in home prices soaring when the housing market surged during the COVID-19 pandemic. Spurs are on.

Despite the recession, Atom said the findings on the most at-risk areas “did not indicate an imminent decline in the national housing market.”

A growing number of experts have warned of a slump in the housing market in recent months, but most agree that it’s nowhere near the troughs seen when the market crashed during the Great Recession.

Number of Contracted Homes in Manhattan A whopping 39% declined According to a recent report from brokerage firm Serhant,

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