REAL ESTATE NEWS

Would-be homeowners in five counties in the U.S. would have needed almost all or more than their entire annual salary to afford the median-priced home in their area with down payment, mortgage and other expenses included, a new analysis of special housing risk by ATTOM has found.

And in 339 of the 572 U.S. counties studied, buyers would have had to pay more than the national average of 32.5% of their annual salary to buy a median-priced home with the associated expenses. In 109 counties, the share required would have been more than half their annual income.

Of the 50 counties with the highest risk, 14 were in California, led by Butte, Humboldt, and Shasta counties in the northern part of the state. Nine were in New Jersey, with Atlantic and Cumberland counties the worst affected.

Risk was assessed by a formula based on the percentage of county properties with a foreclosure filing, the share of average local wages needed to pay for major expenses, the percentage of properties with outstanding mortgage balances greater than their market value, and county-level unemployment rates. The data is for 1Q 2025.

Nationwide, 2.8% of properties had mortgages considered seriously underwater – a low number attributable to the robust post-pandemic housing market, according to ATTOM. However, in almost 40% of the 572 counties studied, the rate was higher, and in some Louisiana parishes — it was in double digits.

The national average of home foreclosures is one in every 1,515 homes. But in 20% of the counties analyzed, more than one of every 1,000 properties faced foreclosure and in some areas the odds were even worse, like one in every 434 homes in Dorchester, SC, with similar distress in Highlands County, FL, Cumberland County, NJ, and Kaufman and Johnson counties in Texas.

A third of the counties studied experienced high unemployment rates, compared to the national rate of 4.3%. Four of the highest rates were found in California in Imperial, Tulare, Merced, and Kings counties, as well as in Yuma County, AZ.

Perhaps surprisingly, the Southern states – often viewed as among the nation’s poorest – hosted 27 of the 50 least at-risk counties in the country, led by Tennessee with nine counties in this category and Virginia (seven). The South was followed by the Midwest (12), including four in Wisconsin, and the Northeast (seven).

The counties considered least risky nationwide were generally more affordable, though not by a large margin. All five counties with the lowest portion of wages required to own a home were in the South. In 44 of the 50 least at-risk counties, the share of seriously underwater mortgages was lower than the 2.8% national rate. Only one county – Shelby, AL – had a worse foreclosure rate than the national average, and none of the 50 counties had unemployment rates higher than the national rate.

"Affordability is an obvious concern, but as the data shows, there's a complex interplay between price, wages, mortgage health, and foreclosure rates that can give even greater insight into where property values are likely to go in the future," said ATTOM CEO Rob Barber.

Source: GlobeSt/ALM