The cities where homeowners are most likely to default

Analysis from ValuePenguin flags the riskiest metros

The cities where homeowners are most likely to default

An analysis of more than 200 US metros has discovered those that have the highest risk of mortgage defaults.

Using several metrics including delinquency rates, unemployment rates, monthly cash flows after meeting expenses, and changes in home values relative to outstanding mortgage debt, mortgage experts from ValuePenguin ranked cities based on the likelihood of defaults.

They found that 9 out of the 10 riskiest MSAs are in the South with Texas having the three highest-risk cities: McAllen-Edinburg-Mission, Brownsville-Harlingen, and Laredo, which are all on the border with Mexico.

Visalia-Porterville, California; Flint, Michigan; McAllen-Edinburg-Mission, Texas and Atlantic City-Hammonton, New Jersey were most at risk for default within their respective regions.

By contrast, cities in the West fared best overall, boasting eight of the 10 cities with the lowest default risk in the country.

The cities most at risk are suffering conditions including high unemployment, low incomes, declining home values, and in the case of the Northeast, declining mortgage lending activity which ValuePenguin’s analysis says will “likely have a negative impact on home prices throughout the region.”