L.A.-area housing under stress

It's the third-worst reading in the country, behind only Miami and Riverside-San Bernardino, according to the Real Time Economics stress indicator. Using recently released data from the Census Bureau, the WSJ blog looks at three factors:

--the fraction of mortgage-holding homeowners in a community with a monthly housing payment in excess of 30 percent of income
--the percentage of all people in the region without health insurance
--the fraction of the population without a job.

Put them all in a blender and the L.A.-Long Beach-Santa Ana area winds up with a reading of 109.3, compared with the U.S. average of 85.7. Following L.A. are San Diego, Vegas, and Orlando.

Continued stress, especially in the prime markets for foreclosures, could mean more trouble ahead for housing, which has recently showed signs of stabilization. Indeed, Fannie Mae has reported that since the Census data were collected in 2009, the number of mortgages delinquent for more than 90 days has started to drop. But past-due mortgages remain at extemely high levels, and some of the decline over the course of 2010 was accompanied by a rise in foreclosures, as moratoriums in several states expired.

Here's an interactive map that lays out all the metro areas surveyed. It's an interesting approach, but as with all such indexes, there are some obvious flaws. First off, coming up with a single number for L.A./OC isn't terribly revealing because there are so many micro-economies within the metro area. Also, lots of homeowners are able to spend more than 30 percent of their income on housing costs without worrying about the monthly mortgage. In locations with extremely high median home prices, it's quite common. With the housing market, one size does not fit all.