Western U.S. Is More Affected Than Other Markets By Housing Slowdown

Western states and more upscale areas around the country are bearing the brunt of the slowdown in the U.S. housing market, according to a report from real estate data analytics firm ATTOM.

Nearly half of the 50 counties seeing the biggest impact are in the West. Among the top 50, 12 were in Oregon and Washington, according to ATTOM’s Special Housing Impact Report, which looked at patterns during the first quarter of 2023, including changes in home prices, home affordability, underwater mortgages and foreclosures since the second quarter of 2022.

At the other end of the spectrum, the South, Midwest and Northeast have seen less fallout and lower-priced markets. Led by Texas, Connecticut and Illinois, states in those regions had 18 of the 50 counties showing the smallest effects from the pullback, which began last year after a decade of gains in prices, profits and other key measures.

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“We are starting to see some patterns that show where the U.S. housing market is cooling off and how it’s hitting homeowners based on some key metrics. It looks so far — and it’s important to stress ‘so far’ — to be having more impact in places with the highest housing costs and less impact elsewhere,” ATTOM CEO Rob Barber said. “This doesn’t mean those markets are in danger of a big fall while others are immune, but the data does provide a useful geographical snapshot of the initial market dip.”

The trend emerged after the U.S. housing market endured three consecutive quarters of flat or negative performance for the first time in more than a decade. Prices, seller profits and homeowner equity fell in most of the country while foreclosure activity increased.

It happened as average home mortgage rates doubled to more than 6% for a 30-year fixed loan, inflation was as high as 9%, the stock market faltered and economic uncertainty increased, further squeezing consumers’ wallets.

Western states and higher-priced markets were the most affected, with Oregon and Washington feeling the greatest impact.

Lower-priced markets scattered throughout the Midwest, South and Northeast are feeling less impact, with Texas faring the best.

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