Collateral Risk Indicators

The Housing Collateral Risk Indicators identify neighborhoods most at risk from economic stress. It allows homebuyers to make better decisions regarding in which neighborhoods and when to buy a home. It allows decision makers to monitor, predict, and prevent potential foreclosures. Collateral Risk is one of the driving forces of housing booms and busts cycles. It disproportionately affects low-income and minority households.

For the first time, the AEI Housing Center’s extensive data is able to measure collateral risk for neighborhoods by combining data on land shares and prices, house prices, mortgage risk, home characteristics, borrower income and minority status, new construction activity, Walk Score®, and other key housing market indicators from AEI’s National Housing Market Database.

The Collateral Risk Indicators provide

• A collateral risk rating for each ZIP Code and Census Tract in the largest 50 metros,
• An in-depth examination of the relationship between land shares, mortgage default risk, home price appreciation, and borrower income or minority status.
• An explanation for housing booms and busts cycles by tracking collateral risk before and after the Great Recession and during the current housing cycle.

The two interactive tools below allow users to explore the Collateral Risk Indicators at the ZIP Code and Census Tract level, as well as additional analysis for the nation’s largest 50 metros.

Abbreviations used in the interactives: HPA = Home Price Appreciation. MDR = Mortgage Default Rate (measures the likelihood of default under stress). LS = Land Share. LV = Land Value. Curr = Current. Hist = Historical

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ZIP Level

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Tract Level