Report: Montgomery, Birmingham, Mobile among American cities most in danger of housing crash
According to a report, Montgomery is one of the 10 cities across the nation most likely to experience a housing crash this year, while Birmingham ranked 12 in the same undesirable metric.
In the study, GoBankingRates analyzed data on 175 of the largest American cities.
Researchers then used key factors, including the percentage of homes with mortgages with negative equity (also known as “underwater”), meaning the home is currently worth less than the total cost of the mortgage, along with the city’s mortgage delinquency rate from Zillow’s February 2019 index.
The personal finance website’s report also calculated each area’s homeowner vacancy rate and rental rate using data from the Census Bureau’s 2017 American Community Survey, combined with foreclosure rates from RealtyTrac.
To make the list, cities had to have rates of negative equity in excess of 8.2 percent, which is the national average rate of homes “underwater.”
Birmingham was ranked 12 most in danger of a housing crash in 2019, with Montgomery coming in at number 10.
GOBankingRates wrote, “Birmingham’s 26.5% of mortgages underwater is more than triple the rate of the country overall, though Alabama’s capital Montgomery is actually worse in this regard. Another area where Birmingham housing suffers is in its rental vacancy rate, which at 9% is far above the national average of 6.1%.”
For Montgomery, 28.2 percent of mortgages are underwater.
The report outlined, “Well over a quarter of Montgomery homes are underwater on their mortgage. Alabama’s capital has a better foreclosure rate than Birmingham, but with one in every 1,772 homes in foreclosure, Montgomery’s foreclosure rate is far above the U.S. average.”
While not faring quite as poorly, Mobile was also named in the top-40 of most at risk cities.
Coming in at 27, Alabama’s coastal city has 16.1 percent of its mortgages underwater.
“Mobile is certainly cheaper to live in than most other cities. However, Mobile’s housing leaves much to be desired. One in six homes with a mortgage has negative equity. In the meantime, 11.9% of rental units are unoccupied, giving Mobile the fourth-highest rental vacancy rate in the study,” GOBankingRates said.
Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn