Memphis downtown skyline w/ trees and Wolf Rover and boats and harbor in the foreground.

While much of the country has bounced back from the housing crash, Memphis and other smaller markets are having a harder time. (Getty Images)

For much of the U.S., the housing market crash and Great Recession are a recent reminder of the worst-case scenario when lending and homeownership are approached cavalierly. But these events have also become a piece of history, as home prices and homebuying rates have largely climbed above pre-recession levels.

But in some parts of the country, residents are still waiting for that bounce back from the recession – and it may never come in the way people hope. The number of homeowners currently underwater – owing more on their mortgage than the property’s value – is low nationally at 5.1 million properties, or 9.3 percent of mortgaged properties in the U.S., as of the second quarter of 2018, according to real estate information company ATTOM Data Solutions.

Concentrated portions of the U.S. carry the bulk of that load, however, with some metro areas seeing more than 1 in 5 homes underwater and more than half of properties underwater in specific ZIP codes, per ATTOM information.

[Read: 5 Reasons to Hold Off on Buying a Home Now.]

ATTOM Data Solutions examined 97 metro areas throughout the U.S. in its recent report on seriously underwater properties in which the homeowner owes at least 125 percent of the home’s value. While it’s hard to pinpoint a normal share of the market that's underwater, Daren Blomquist, senior vice president of communications for ATTOM, says a fairly healthy market should have “around 5 percent or even less of homes that are seriously underwater.”

The following four metro areas stood out with high rates of seriously underwater properties:

Memphis, Tennessee: 20.5 percent
Youngstown, Ohio: 19.5 percent
Scranton, Pennsylvania: 19.5 percent
Toledo, Ohio: 18.9 percent

The only metro area with a higher share of seriously underwater properties is Baton Rouge, Louisiana, at 20.8 percent, where the housing market is still suffering from the effects of historic flooding in August 2016. The natural disaster is more the cause of housing market woes than any economic factors, Blomquist says.

But for Memphis, Youngstown, Scranton and Toledo, Blomquist explains they fall “into the category of cities that were struggling before the recession in some ways and are continuing to struggle.” In the U.S. Department of Housing and Urban Development's comprehensive market analysis for the Youngstown metro area, nonfarm payrolls were not only still below pre-recession levels at the time the report was published in 2016, but they were also as much as 12 percent below the historic peak, which occurred in 2000.

How Did We Get Here?

Unemployment rates for Memphis, Youngstown and Scranton, in particular, linger primarily above the national average going as far back as 2003, according to the U.S. Bureau of Labor Statistics, including during the recession when national unemployment rates reached above 9 percent during the recession.

Without an increase in available jobs, fewer homebuyers are on the market and many others could leave the area, leading to relatively stagnant home value growth. On top of that, when homeowners face loss of income due to layoffs or little to no increase in income for several years, paying off their mortgage becomes harder.

[See: The 25 Best Affordable Places to Live in the U.S.]

It’s not just a matter of some markets lagging behind others. Many parts of the Rust Belt and rural U.S. continue to have floundering housing markets, while larger, more populous metro areas benefit from continued population growth. In a recent study by real estate information site Trulia, non-metro areas saw a decrease in population of about 1 percent between 2012 and 2017, while home value appreciation for the same areas increased 27.9 percent over the same period. Compare that to a metro area like Phoenix, which saw its population grow by 9.6 percent and home values appreciate by 75.3 percent during the same time frame.

“The reason people are leaving the rural areas is because the jobs have been created in the metro areas,” says Felipe Chacón, housing economist for Trulia.

Rural parts of the U.S. have traditionally based their economies around agriculture and manufacturing, two industries that have been disrupted significantly through automation. “Farms [and factories] can increasingly be managed by fewer and fewer people,” Chacón says.

Automation isn’t a post-recession anomaly, and both smaller metros tied to more agricultural and manufacturing industries and the non-metro rural areas themselves have been feeling the economic pain for longer than that. As job opportunities decrease in the rural sectors, employment continues to rise in tech and other industries that thrive in urban and suburban settings.

“Those are areas where they were struggling before the recession, and when the recession hit … because of the situation they were already in, it’s been tougher to bounce back,” Blomquist says.

When Will Recovery Happen?

The fact that home values in non-metro markets have been able to recover, if in a small way compared to major metro areas, is a sign that rural markets aren’t dead or dying – they’re just adjusting to a new reality. In a comprehensive market analysis published in 2016, HUD notes economic and housing market growth has occurred in the Memphis market, even if that growth hasn't reached the level of the rest of Tennessee.

Chacón doesn’t expect the population or job market in rural areas to necessarily return to previous high points but instead stabilize as smaller markets than they once were. The areas that manage to maintain employment diversity with county or local government jobs, rural health care and teaching, among others, will “keep population better than other areas and will be able to sort of sustain themselves,” he says.

In HUD's market analysis for the Toledo metro area, for example, which was published in 2014, farming and manufacturing jobs were still at a net loss since 2000, though education, health care, hospitality, leisure and other services managed to increase in employment opportunities over the same time period.

This could also be the case for the metro areas with high rates of underwater properties, like Scranton or Youngstown, which may need to restabilize as a different, smaller market. Though, that doesn’t necessarily mean it’ll be easy for homeowners currently underwater to gain equity back in their homes as demand for properties continues to decline.

To be able to make a comeback in terms of home values, Blomquist says markets and ZIP codes with long-standing high levels of seriously underwater properties can’t expect a quick return to better economic times. An exception could occur with a sudden change or major employer entering the city, like Amazon HQ2, though none of the cities on ATTOM’s list made it to Amazon’s short list.

[Read: Do You Live in a Food Desert?]

It’s impossible to tell which metro areas or towns will see a renaissance through major employer relocations and subsequent population growth and which will continue to shrink until it reaches an even point.

“An influx of jobs could change things more quickly, but for now most of these cities are on the long path for recovery – slowly,” Blomquist says.

The 25 Best Places to Find a Job in the U.S. in 2018

Looking for a new work-related adventure?

San Jose, USA - March 3, 2015: Downtown San Jose California, featuring the hotel DeAnza, Office towers, traffic light and Almaden Bl road sign. Photographed on a sunny day with clear blue sky. No traffic on the street.

(Getty Images)

When you’re considering moving to a new place, how you plan to make money matters a lot. A flourishing job market can easily mean the difference between making it and burning out in a new town. This is why in the overall ranking of the Best Places to Live, each metro area’s job market – comprised of its unemployment rate and median salary – accounted for 20 percent of the final score. Read on for the 25 strongest job markets in our ranking of the 125 most populous places in the U.S.

25. Dallas-Fort Worth

25. Dallas-Fort Worth

Photo of Dallas skyline in the morning. Sunrise moment. Dusk.

(Getty Images)

Best Places 2018 Rank: 18
Metro Population: 6,957,123
Median Home Price: $210,181
Median Annual Salary: $50,350
Unemployment Rate: 3.7 percent

The Dallas-Fort Worth area’s top employers come from a wide range of industries – from technology and finance to oil and manufacturing. A big contributor to its success is the number of major corporations that call the area home, including AT&T, Southwest Airlines, Comerica and Texas Health Resources.

Learn more about Dallas-Fort Worth.

24. Omaha, Nebraska

24. Omaha, Nebraska

Omaha Nebraska

(Getty Images)

Best Places 2018 Rank: 28
Metro Population: 904,834
Median Home Price: $165,667
Median Annual Salary: $46,490
Unemployment Rate: 3 percent

Nebraska’s largest city is home to a wide range of industries, including financial institution Berkshire Hathaway and Union Pacific Railroad. Omaha also hosts a developing tech industry, an example of startups seeking less-populated cities to base operations and reduce expenses.

Learn more about Omaha.

23. Worcester, Massachusetts

23. Worcester, Massachusetts

Worcester, Massachusetts, USA Skyline at rush hour.

(Getty Images)

Best Places 2018 Rank: 62
Metro Population: 930,667
Median Home Price: $232,633
Median Annual Salary: $52,170
Unemployment Rate: 4.1 percent

Located in central Massachusetts, Worcester residents benefit from a low unemployment rate of just 4.1 percent compared to the national average of 4.4 percent.

Learn more about Worcester.

22. Fayetteville, Arkansas

22. Fayetteville, Arkansas

Fayetteville is the third-largest city in Arkansas and county seat of Washington County.

(Getty Images)

Best Places 2018 Rank: 5
Metro Population: 503,642
Median Home Price: $182,508
Median Annual Salary: $44,980
Unemployment Rate: 2.7 percent

The Fayetteville area maintains a low unemployment rate – just 2.7 percent – with diverse employers that include the University of Arkansas, Tyson Foods Inc. and Walmart.

Learn more about Fayetteville.

21. Huntsville, Alabama

21. Huntsville, Alabama

This could be anywhere downtown.  The various brick buildings, and the fresh contrasting painted building give us a glimpse into the past.

(Getty Images)

Best Places 2018 Rank: 7
Metro Population: 440,230
Median Home Price: $161,600
Median Annual Salary: $52,960
Unemployment Rate: 4 percent

Home to NASA’s Marshall Space Flight Center, Huntsville attracts aerospace engineers not just for the NASA job opportunities, but also for the aerospace jobs from companies that are based in the area as a result of the government entity’s location.

Learn more about Huntsville.

(*Median home price for Huntsville was not available, so median home value is listed.)

20. Baltimore

20. Baltimore

(Getty Images).

Best Places 2018 Rank: 83
Metro Population: 2,780,873
Median Home Price: $243,633
Median Annual Salary: $54,920
Unemployment Rate: 4.2 percent

Many of Baltimore’s biggest employers are in the health care industry, from Johns Hopkins University and the associated Johns Hopkins Health System to MedStar Health and the University of Maryland Medical System.

Learn more about Baltimore.

19. Colorado Springs, Colorado

19. Colorado Springs, Colorado

A view of Downtown Colorado Springs in front of Pikes Peak in the winter.

(Getty Images)

Best Places 2018 Rank: 2
Metro Population: 688,643
Median Home Price: $255,233
Median Annual Salary: $49,450
Unemployment Rate: 3.1 percent

Home to the U.S. Air Force Academy, the North American Air Defense Command, a U.S. Army base and an additional Air Force base, Colorado Springs’ job market is heavily defense- and aerospace-based. Still, the Rocky Mountain locale keeps the area's tourism industry strong as well.

Learn more about Colorado Springs.

18. Hartford, Connecticut

18. Hartford, Connecticut

Hartford, Connecticut, USA downtown cityscape.

(Getty Images)

Best Places 2018 Rank: 46
Metro Population: 1,211,826
Median Home Price: $206,383
Median Annual Salary: $58,400
Unemployment Rate: 4.8 percent

The Hartford metro area may have an above-average unemployment rate, but as a hub for the insurance industry and other businesses, residents earn a median annual salary of $58,400, nearly $10,000 above the national average.

Learn more about Hartford.

17. Portland, Oregon

17. Portland, Oregon

Sunrise View of Portland, Oregon from Pittock Mansion.

(Getty Images)

Best Places 2018 Rank: 6
Metro Population: 2,351,319
Median Home Price: $349,675
Median Annual Salary: $53,960
Unemployment Rate: 3.8 percent

A flourishing tech industry isn’t the only thing keeping Portland’s median annual salary high and its unemployment rate below the national average. Manufacturing, athletic and outdoor apparel and health care companies all contribute to Portland’s economy.

Learn more about Portland.

16. Des Moines, Iowa

16. Des Moines, Iowa

(Getty Images)

Best Places 2018 Rank: 4
Metro Population: 611,755
Median Home Price: $181,217
Median Annual Salary: $49,420
Unemployment Rate: 2.9 percent

While the Des Moines area’s median salary is slightly below the national average of $49,630, the cost of living is far lower, as the typical resident uses just 23.52 percent of his or her household income on living expenses. The low cost of living is just one factor bringing tech companies and startups to the metro area.

Learn more about Des Moines.

15. San Diego

15. San Diego

Skyscrapers of San Diego skyline with reflections and cloudscape.

(Getty Images)

Best Places 2018 Rank: 30
Metro Population: 3,253,356
Median Home Price: $521,067
Median Annual Salary: $55,480
Unemployment Rate: 4 percent

San Diego attracts residents with its ideal weather and helps them stay with a number of diverse job opportunities. San Diego is home to the U.S. Pacific Fleet and has a large number of military personnel as a result, not to mention opportunities in technology, tourism and research stemming from the area’s universities.

Learn more about San Diego.

14. Austin, Texas

14. Austin, Texas

Map of Texas with Austin skyline in background.

(Getty Images)

Best Places 2018 Rank: 1
Metro Population: 1,942,615
Median Home Price: $278,608
Median Annual Salary: $50,830
Unemployment Rate: 3.2 percent

While Austin attracts a wide variety of businesses, with government and education being major employers in the area, it draws a lot of tech companies as well. A less expensive place to set up shop than Silicon Valley, Austin is now considered a major tech hub.

Learn more about Austin.

13. Portland, Maine

13. Portland, Maine

Spring Point Ledge Lighthouse in South Portland, Maine is one of the best Maine lighthouses

(Getty Images)

Best Places 2018 Rank: 27
Metro Population: 523,874
Median Home Price: $219,658
Median Annual Salary: $47,770
Unemployment Rate: 2.6 percent

Portland’s job market thrives on small businesses, ranging from retail to manufacturing. But the high success rate of small businesses doesn’t keep larger companies from calling the area home, such as L.L. Bean, which is based in Freeport, Maine.

Learn more about Portland.

12. Santa Rosa, California

12. Santa Rosa, California

Santa Rosa, vineyard

(Getty Images)

Best Places 2018 Rank: 77
Metro Population: 497,776
Median Home Price: $499,513
Median Annual Salary: $52,670
Unemployment Rate: 3.4 percent

In the heart of California wine country, Santa Rosa sees a high number of its residents working on farms and at wineries and brewpubs, with another significant portion holding jobs in tourism.

Learn more about Santa Rosa.

11. Minneapolis-St. Paul

11. Minneapolis-St. Paul

Minneapolis Minnesota Downtown and the Stone Arch Bridge at Sunset

(Getty Images)

Best Places 2018 Rank: 9
Metro Population: 3,488,436
Median Home Price: $237,367
Median Annual Salary: $55,010
Unemployment Rate: 3.3 percent

Minneapolis boasts strong life science, biotechnology and health-tech industries, as well as familiar corporations headquartered in the area, including Target, Best Buy and General Mills.

Learn more about Minneapolis-St. Paul.

10. Madison, Wisconsin

10. Madison, Wisconsin

A vivid, photo taken from an airplane of downtown Madison, Wisconsin in spring.

(Getty Images)

Best Places 2018 Rank: 16
Metro Population: 634,269
Median Home Price: $238,375
Median Annual Salary: $50,830
Unemployment Rate: 2.4 percent

Along with its strong health care industry, Madison has a growing biotechnology market and attracts startups for its low cost of living but close proximity to well-connected corporations like health care software company Epic Systems.

Learn more about Madison.

9. Manchester, New Hampshire

9. Manchester, New Hampshire

Manchester is the largest city in the state of New Hampshire and the largest city in northern New England. Manchester is known for its industrial heritage, riverside mills, affordability, and arts & cultural destination.

(Getty Images)

Best Places 2018 Rank: 37
Metro Population: 404,948
Median Home Price: $236,174
Median Annual Salary: $51,920
Unemployment Rate: 2.7 percent

With an extremely low unemployment rate of just 2.7 percent, Manchester residents work in a variety of industries, from technology and communications to financial services, health care and manufacturing.

Learn more about Manchester.

8. New York City

8. New York City

Times Square in New York.

(Getty Images)

Best Places 2018 Rank: 96
Metro Population: 20,973,061
Median Home Price: $374,814
Median Annual Salary: $61,925
Unemployment Rate: 4.4 percent

Naturally, the Big Apple makes the list, with a number of domestic and international businesses calling the area home. New York’s major industries range from finance and fashion to shipping and manufacturing, and the city is considered the financial and publishing capital of the U.S.

Learn more about New York.

7. Honolulu

7. Honolulu

Last minute vacation in Honolulu, Hawaii

(Getty Images)

Best Places 2018 Rank: 35
Metro Population: 986,999
Median Home Price: $581,658
Median Annual Salary: $51,080
Unemployment Rate: 2.4 percent

With active U.S. Army and Air Force bases on Oahu, Honolulu has a sizable percentage of residents in the defense industry, though it’s no surprise tourism is the island's leading industry. But the individual companies employing the most Honolulu residents are actually in the health care industry. Honolulu has the lowest unemployment rate of the 125 most populous metro areas in the U.S.

Learn more about Honolulu.

6. Seattle

6. Seattle

High dynamic image of Seattle skyline in dramatic sunrise colors across pier-66 waterfront

(Getty Images)

Best Places 2018 Rank: 10
Metro Population: 3,671,095
Median Home Price: $403,650
Median Annual Salary: $61,170
Unemployment Rate: 3.9 percent

Seattle’s job market has an enviable reputation, with the likes of Amazon, Starbucks and Microsoft calling the area home, and major offices for corporations like Google offering highly desired job opportunities as well.

Learn more about Seattle.

5. Denver

5. Denver

Cherry Creek, Denver Colorado

(Getty Images)

Best Places 2018 Rank: 3
Metro Population: 2,752,056
Median Home Price: $362,492
Median Annual Salary: $55,910
Unemployment Rate: 2.6 percent

Educational institutions such as the University of Colorado and the University of Denver create a substantial amount of research roles in the area. Strong business in aerospace, defense and tourism also help fuel Denver’s strong job market.

Learn more about Denver.

4. Boston

4. Boston

(Getty Images)

Best Places 2018 Rank: 25
Metro Population: 4,728,844
Median Home Price: $399,458
Median Annual Salary: $64,080
Unemployment Rate: 3.5 percent

With dozens of colleges and universities in the metro area, including Harvard University and Massachusetts Institute of Technology, Boston has guaranteed extensive opportunities in the education and research fields and a young workforce to take advantage of them.

Learn more about Boston.

3. Washington, D.C.

3. Washington, D.C.

The Lincoln Memorial just after sunset from the edge of the reflecting pool in Washington, D.C.

(Getty Images)

Best Places 2018 Rank: 8
Metro Population: 6,011,752
Median Home Price: $368,642
Median Annual Salary: $68,000
Unemployment Rate: 3.7 percent

The District of Columbia offers a significant amount of work in the public sector and with government contractors, but it also has a steadily growing number of private-sector companies headquartered in the area, including Marriott International and Mars Inc. in the Maryland and Virginia suburbs, respectively.

Learn more about Washington.

1. San Francisco

1. San Francisco

California Street Cable Car in San Francisco

(Getty Images)

Best Places 2018 Rank: 20
Metro Population: 4,577,530
Median Home Price: $790,233
Median Annual Salary: $69,110
Unemployment Rate: 3.3 percent

Tied at the No. 1 spot is San Francisco, where residents enjoy a strong job market that thrives in tourism, technology, finance and business. San Francisco residents also enjoy a high median annual salary of more than $69,000.

Learn more about San Francisco.

1. San Jose, California

1. San Jose, California

Mixed-use european style buildings of the upscale Santa Row shopping district in San Jose, California.

(Getty Images)

Best Places 2018 Rank: 17
Metro Population: 1,943,107
Median Home Price: $932,108
Median Annual Salary: $78,990
Unemployment Rate: 3.3 percent.

The capital of Silicon Valley continues to reign supreme, tied with its neighbor San Francisco for the top spot on the list. San Jose has the highest average salary out of the 125 largest metro areas in the U.S., combined with a below-average unemployment rate.

Learn more about San Jose.

Read More

Tags: real estate, housing, housing market, home prices, farming, recession

Devon Thorsby is the Real Estate editor at U.S. News & World Report, where she writes consumer-focused articles about the homebuying and selling process, home improvement, tenant rights and the state of the housing market.

She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.

Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at

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