15 States That Could Be Heading for a Housing Crisis

The housing crisis of 2008-2009 is forever burned in our memory — a time of irresponsible lending, dramatic financial and housing losses and economic hardship that no one wants to live through again. While regulations and practices that the government and industry put into place should keep that degree of crash from happening again, there are still conditions that can cause individual states to experience housing crises.

To determine states that could be poised for a housing crisis, GOBankingRates looked at each state’s key statistics, such as percent of mortgages that are delinquent, homeowner vacancy rates, rental vacancy rates and foreclosure rates. These five factors were then scored and combined with the highest score indicating the state most likely to be poised for a housing crisis.  All data was collected on and up to date as of May 2, 2023. Take a look at the states that are at risk.

• % of Mortgages 30-89 days delinquent: 1.2%
• Homeowner Vacancy Rate: 1.5%
• Rental Vacancy Rate: 7.3%

Of the 797,596 homes that are for sale, one out of 4,711 homes is foreclosed in New Mexico.

• % of Mortgages 30-89 days delinquent: 1.0%
• Homeowner Vacancy Rate: 1.2%
• Rental Vacancy Rate: 4.1%

In New Jersey, one out of 2,299 homes for sale has been foreclosed and 0.6% of mortgages are 90 or more days delinquent.

• % of Mortgages 30-89 days delinquent: 1.3%
• Homeowner Vacancy Rate: 1.6%
• Rental Vacancy Rate: 6.6%

Of Georgia’s 3,885,371 homes for sale, one out of 3,899 of these homes is foreclosed. Coupled with increasing vacancy rates, this doesn’t bode well.

• % of Mortgages 30-89 days delinquent: 1.1%
• Homeowner Vacancy Rate: 1.3%
• Rental Vacancy Rate: 5.4%

In Maryland, though there is a solid amount of homes for sale, 2,294,270, one out of 2,629 homes has been foreclosed.

• % of Mortgages 30-89 days delinquent: 1.0%
• Homeowner Vacancy Rate: 1.8%
• Rental Vacancy Rate: 7.9%

Florida may be the land of sunshine and great beaches, but it isn’t immune to a housing crisis. In addition to increasing vacancy rates, 0.5% of mortgages are 90 or more days delinquent.

• % of Mortgages 30-89 days delinquent: 1.5%
• Homeowner Vacancy Rate: 1.4%
• Rental Vacancy Rate: 9.3%

Of the generous number of homes for sale in Alabama, 1,902,983, one out of 6,076 homes is foreclosed. And the rate of delinquent mortgages is growing.

• % of Mortgages 30-89 days delinquent: 1.3%
• Homeowner Vacancy Rate: 1.1%
• Rental Vacancy Rate: 6.2%

Of the homes for sale in Indiana, 2,622,601, one out of every 2,223 homes is foreclosed.

• % of Mortgages 30-89 days delinquent: 1.1%
• Homeowner Vacancy Rate: 1.5%
• Rental Vacancy Rate: 6.0%

In Illinois, though there are 4,930,255 homes for sale, one out of 2,050 of them is foreclosed.

• % of Mortgages 30-89 days delinquent: 1.5%
• Homeowner Vacancy Rate: 1.6%
• Rental Vacancy Rate: 7.2%

Early inklings of trouble may be reflected in the fact that 0.7% of mortgages are 90 or more days delinquent in Arkansas.

• % of Mortgages 30-89 days delinquent: 1.4%
• Homeowner Vacancy Rate: 1.6%
• Rental Vacancy Rate: 7.9%

In addition to having mortgages that are delinquent in the 30-89 day time frame, an additional 0.7% of mortgages are 90 or more days delinquent in Oklahoma, potentially signaling problems.

• % of Mortgages 30-89 days delinquent: 1.4%
• Homeowner Vacancy Rate: 1.4%
• Rental Vacancy Rate: 8.7%

Mortgage holders are having a tough time in South Carolina. At the time of this study, 0.6% of mortgages are 90 or more days delinquent and vacancy rates are climbing.

• % of Mortgages 30-89 days delinquent: 1.3%
• Homeowner Vacancy Rate: 1.7%
• Rental Vacancy Rate: 5.6%

Delaware already has a relatively small number of homes for sale, 381,097, and of those, one out of 2,161 homes are foreclosed.

• % of Mortgages 30-89 days delinquent: 1.8%
• Homeowner Vacancy Rate: 1.7%
• Rental Vacancy Rate: 7.1%

West Virginia also has a smaller inventory of homes compared to other states, at 711,352. Of these, one out of 12,278 homes has been foreclosed.

• % of Mortgages 30-89 days delinquent: 1.8%
• Homeowner Vacancy Rate: 1.6%
• Rental Vacancy Rate: 8.1%

Louisiana has a sizable housing inventory, of 1,748,688 homes for sale, but delinquency rates on mortgages are climbing. In addition to 1.8% of mortgages 30-89 days delinquent, mortgages 90 or more days delinquent now account for a full 0.9%.

• % of Mortgages 30-89 days delinquent: 2.1%
• Homeowner Vacancy Rate: 1.6%
• Rental Vacancy Rate: 9.4%

Mississippi has the highest rates of delinquency, with mortgages 30-89 days delinquent coming in at 2.1%, and mortgages 90 or more days delinquent at 1%.

Methodology: In order to find states that could be poised for a housing crisis, GOBankingRates looked at each state’s: (1) percent of mortgages 30-89 days delinquent as sourced from the Consumer Financial Protection Bureau; (2) percent of mortgages 90-plus days delinquent as sourced from the Consumer Protection Bureau; (3) homeowner vacancy rate as sourced from the 2021 American Community Survey; (4) rental vacancy rate as sourced from the 2021 American Community Survey; and (5) foreclosure rate as sourced from SoFi’s January 2023 data.These five factors were then scored and combined with the highest score indicating the state most likely to be poised for a housing crisis. Factors (1) and (2) were weighted 2x, factor (4) was weighted 0.5x, and factor (5) was weighted 1.5x. All data was collected on and up to date as of March 8, 2023.

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