Pandemic foreclosure vulnerability was concentrated in the East in 2Q

The housing markets facing the highest pandemic-related foreclosure risk spread across more states in the second quarter.

The top 50 most vulnerable counties are now in 18 different states compared to 15 in the first quarter, according to Attom Data Solutions’ coronavirus report, which measures vulnerability through a mix of homes underwater, foreclosure filings and home affordability in each area.

Illinois, New Jersey, Florida, Delaware and Louisiana combined to account for 32 of the 50, including seven around Chicago, four near New York City and three in the Philadelphia area. At the same time, only five counties in the top 50 were west of the Mississippi River — Mohave County (No. 22) in Arizona, Butte (No. 5) and Humboldt (No. 49) in California, and Cameron (No. 32) and Webb (No. 39) in Texas.

Delaware County, Pa., ranked as the most vulnerable market in the nation, with 36.4% of properties underwater as of the first quarter. About 0.05% of homes in the county filed for foreclosure as of the second quarter and a 51.7% share of income is needed to buy a median-priced home there. Kendall County, Ill., followed with 15.2%, 0.07% and 39.3% splits respectively, then came McHenry, Ill., with 19.3%, 0.06% and 34.1%.

Geographic concentrations of vulnerability will likely persist but recent COVID-19 case spikes and how the end of the federal foreclosure moratorium plays out from state to state could shift those dynamics, according to Attom’s Chief Product Officer Todd Teta.

“The West probably sat in the best position because of a concentration of wealth and high home values, which helped more homeowners build equity, stay up to date on their mortgages and avoid foreclosure,” Teta said in a statement to National Mortgage News. “The Northeast continued to face a double-whammy of high coastal home prices that hurt affordability and lower incomes in some areas that likely led to relatively high percentages of underwater mortgages.”