Seven counties in New Jersey are among the most vulnerable to the impact the coronavirus pandemic has on foreclosures and homeownership, according to a new report by California-based ATTOM Data Solutions, a real estate data curator.
In its 2020 Special Report, ATTOM highlighted 487 county-level markets in the United States that were more or less at risk to the economic impacts of COVID-19 in the third quarter of 2020.
The report found pockets in the Northeast and Mid-Atlantic regions were the most at risk — clusters were found in the New York City, Baltimore, Philadelphia and Washington D.C. areas — while the West and Midwest were less vulnerable. New Jersey, New York, Connecticut, Pennsylvania, Maryland and Delaware had 32 of the 50 counties most at-risk.
The company said it ranked the counties based on three categories: percentage of homes currently facing possible foreclosure, the portion of homes with high mortgage balances that exceed the property’s estimated value and the percentage of local wages required to pay for minor home expenses.
“The U.S. housing market continues to show remarkable resilience during a time of widespread economic trouble and high unemployment stemming from the virus pandemic. But amid continued price gains, pockets around the country face greater risk of a fall, especially in and around the Northeast,” Todd Teta, chief product officer with ATTOM Data Solutions, said. “There is much uncertainty ahead, especially if another virus wave hits. We will continue to closely monitor home prices and sale patterns to see if, how and where the pandemic starts rattling local markets.”
Out of the 50 U.S. counties most at-risk, seven are from New Jersey (Bergen, Essex, Passaic, Sussex, Burlington, Camden and Gloucester).
ATTOM said major home ownership costs (taxes, insurance, mortgage) took up more than 30% of average local wages in 35 of the Top 50 counties that were most vulnerable. The highest percentages were from two New Jersey counties: Bergen County (51%) and Passaic County (50%).
At least 15% of mortgages were underwater in the second half of the year in 37 of the 50 most at-risk counties. Nationally, 13% of mortgages fit the category. The top county with the highest underwater rate hailed from the Garden State: Cumberland County (34%).
“While it’s unlikely that we’ll see a return to the historically high levels of foreclosure activity we saw during the Great Recession, it’s a near-certainty that the number of defaults will increase once the foreclosure moratoria have been lifted, and the CARES Act forbearance program expires,” Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company, said. “It’s also likely that foreclosures will be concentrated in markets where there’s a dual-trigger – for example, stubbornly high unemployment rates, and homeowners who are underwater on their loans.”