US home prices are at a record high, according to a new report, but that could soon change.
A housing price crash is a risk in more than 50 U.S. counties, researchers say Real estate data company Attom founded.
That’s great news for first-time homebuyers, but a disappointment for people who already own one and are benefiting from the higher prices.
Three states – California, New Jersey And Illinois – stood out as a risk state. They had the most counties where home prices could crash based on key indicators.
These include high numbers of underwater mortgages and foreclosures plus higher unemployment. Attom looked at 600 counties in the US that had enough data to analyze.
“The housing boom continues to gain momentum. However, some markets are showing signs of potential instability,” said Rob Barber, CEO of Attom.
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“As the housing market continues to face challenges, it is critical to closely monitor regions where key indicators point to a higher likelihood of problems,” he said of the report.
The New York City metropolitan area also contained a large number of risk markets.
In the metropolitan areas around New York and Chicago, and in much of California, 24 of the 51 counties were considered most vulnerable.
The highest-risk counties included three in New York City (Kings County, which includes Brooklyn, Richmond County, which includes Staten Island, and Bronx County) and four in the New York City suburbs (Essex, Passaic, Sussex and Union Counties, all in New Jersey).
There are four counties in Illinois – Cook, Kendall, McHenry and Will – and Lake County in Indiana.
Another 12 were in California: Butte County (Chico), Humboldt County (Eureka), Solano County (outside Sacramento), and Shasta County (Redding) in the northern part of the state.
Central California also includes Kern County (Bakersfield), Kings County (outside Fresno), Madera County (outside Fresno), Merced County, San Joaquin County (Stockton), and Stanislaus County (Modesto).
Two other counties, Riverside and San Bernardino, are in Southern California.
House prices are already falling
Several housing markets in the Sun Belt, which emerged as growth cities during the pandemic, have already seen price corrections.
The number of homes for sale in former hot spots like Fort Worth, Texas, and Tampa, Florida, has skyrocketed in recent months.
According to recent data from Redfin, home prices in both cities are declining year over year.
According to the Housing Center of the American Enterprise Institute, cities like Austin, Texas, and Cape Coral, Florida, saw the biggest price declines over the past year.
Other Florida hotspots, such as Lakeland, Tampa and Crestview, are also experiencing housing downturns as residents try to sell their apartments.
Apartment owners are cutting their prices by up to 40 percent to avoid huge repair costs.
Some homes have lost nearly half a million dollars in asking prices as safety concerns sparked a wave of sales in what estate agents describe as the worst property crisis in decades.
State legislation, enacted after the 2021 collapse of the Champlain Tower South in Surfside, Miami-Dade County, which killed 98 people, means hundreds of thousands of apartment owners are now on the hook for hefty sums for previously neglected maintenance.
Many people are faced with higher costs than their mortgage payments, which can lead to a wave of foreclosures.
Homebuyers may want to take advantage of a weaker market as down payments reach record highs.
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Homebuyers may want to look to Illinois, where the market is expected to soften
New data shows the average down payment for U.S. home buyers is now a staggering $67,500.
Higher mortgage rates encourage home buyers to put down more money to soften the blow.
This, combined with rising home prices, means that down payments of more than $400,000 are now the norm in some US cities.
Redfin’s analysis shows that down payments also increased in percentage terms.
The average homebuyer put down 18.6 percent of the purchase price of a home in June, the highest percentage in more than a decade and up from 15 percent last year.