10 Midwest Cities That Could Be Headed for a Housing Crisis

Over the past couple years the housing market has been so hot it seemed to defy the economic downturn brought about by the pandemic. While many people were losing their jobs due to lockdowns, record low housing inventory had ready buyers in a fervor.

However, like most things, the market can’t stay hot forever. Rising mortgage rates and higher home prices have begun to put a damper on home sales. Additionally, warning signs of a recession have made people nervous, and some parts of the country are being hit harder by inflation than others, like the Midwest.

In order to find the Midwest cities that could be poised for a housing crisis, GOBankingRates looked at the largest 200 cities in terms of total housing units and some crucial factors such as percentage of mortgages that are between 30 and 90+ days delinquent and homeowner and renter vacancy rates. Data was drawn from the Consumer Financial Protection Bureau and the Consumer Protection Bureau. Here are 10 major U.S. cities that could be poised for a housing crisis.

• Homeowner vacancy rate: 3.9%
• % of mortgages delinquent 90 days: 0.5%

• Homeowner vacancy rate: 1.4%
• % of mortgages delinquent 90 days: 0.7%

• Homeowner vacancy rate: 2.0%
• % of mortgages delinquent 90 days: 0.6%

• Homeowner vacancy rate: 0.9%
• % of mortgages delinquent 90 days: 0.6%

• Homeowner vacancy rate: 1.7%
• % of mortgages delinquent 90 days: 0.7%

• Homeowner vacancy rate: 2.1%
• % of mortgages delinquent 90 days: 0.7%

• Homeowner vacancy rate: 1.7%
• % of mortgages delinquent 90 days: 0.6%

• Homeowner vacancy rate: 1.6%
• % of mortgages delinquent 90 days: 0.7%

• Homeowner vacancy rate: 1.7%
• % of mortgages delinquent 90 days: 0.7%

• Homeowner vacancy rate: 3.6%
• % of mortgages delinquent 90 days: 0.7%

Methodology: In order to find the Midwest cities that could be poised for a housing crisis, GOBankingRates looked at the largest 200 cities in terms of total housing units across the following factors: (1) percent of mortgages 30-89 days delinquent by MSA as sourced from the Consumer Financial Protection Bureau; (2) percent of mortgages 90-plus days delinquent by MSA as sourced from the Consumer Protection Bureau; (3) homeowner vacancy rate as sourced from the 2020 American Community Survey; and (4) rental vacancy rate as sourced from the 2020 American Community Survey. These four factors were then scored and combined with the highest score indicating the city most likely to be poised for a housing crisis. Factors (1) and (2) were weighted 2x and factor (4) was weighted 0.5x. The 100 cities most poised for a housing crisis were moved onto the next round of scoring. These 100 cities were then re-ranked and scored on the four factors above as well as (5) foreclosure rate as sourced from RealtyTrac. These five factors were scored and combined with the highest score indicating the city most likely to be poised for a housing crisis. For this second round of scoring, factors (1) and (2) were weighted 2x, factor (4) was weighted 0.5x, and factor (5) was weighted 1.5x. GOBankingRates then isolated those 10 cities in the Midwest with the highest scores for final rankings. All data was collected on and up to date as of May 23, 2022 and rankings were finalized on October 27, 2022.