RealtyTrac’s latest home price bubble warning report says that one in five housing markets is less affordable than its historic norm, but almost half are still in line.

The report analyzed 475 U.S. counties with a combined population of more than 221 million — accounting for more than 70% the total U.S. population — based on three early warning signs of a possible home price bubble: if the market was less affordable in October 2014 than its peak price during the 2005 to 2008 housing bubble; if a market was less affordable in October 2014 than its historical affordability average since January 2000; and if a market had a rising foreclosure rate on loans originated in 2014 compared to loans originated in 2013. 

In the 475 counties analyzed, buying a median-priced home in October 2014 required 26% of median income on average compared to an average of 41% of median income in each county’s respective peak month during the housing bubble.

The historical affordability average going back to January 2000 for all 475 counties was 28% of median income needed to purchase a median-priced home. Meanwhile the average foreclosure rate among the 475 counties on loans originated in 2014 was 0.25%, up from an average of 0.20% for loans originated in 2013.

What's more, housing affordabilty is a serious concern facing the nation for the next several years.

“Affordability and foreclosure rates by loan vintage are two key metrics that will help consumers, investors, institutions and policy makers identify if a housing market is at risk for another price bubble,” said Daren Blomquist, vice president at RealtyTrac. “While 99% of markets have not returned to the irrational affordability levels during the previous housing bubble, one in five markets have now exceeded their historical affordability norms, which is a strong sign that either a new home price bubble is forming in those markets or that home price appreciation will soon plateau until incomes can catch up.

“Meanwhile, foreclosure rates on loans originated in 2014 are still significantly lower than for loans originated during the previous housing bubble in most markets, but there was an uptick in foreclosure rates on 2014 vintage loans compared to 2013 vintage loans in more than one-third of the counties we analyzed,” Blomquist continued. “This is concerning given that the 2014 loans are newer and have had less time to sour than loans originated in 2013.”

There were 98 counties (21% of all counties analyzed)  with a combined population of nearly 62 million where the October affordability percentage was higher than the county’s historical average affordability percentage, including Los Angeles County, Calif., Harris County, Texas in the Houston metro area, Orange County, Calif., in the Los Angeles metro area, Kings County (Brooklyn), N.Y., Dallas County, Texas,  Bexar County, Texas in the San Antonio metro area, Alameda County, Calif., in the San Francisco metro area, Middlesex County, Mass., in the Boston metro area, Oakland County, Mich., in the Detroit metro area and Travis County, Texas, in the Austin metro area.

There were 30 counties (6% of all counties analyzed) with a combined population of nearly 19 million where the October affordability percentage was above the historical average and where foreclosure rates on 2014 vintage loans were higher than foreclosure rates on 2013 vintage loans, including Kings County, N.Y. (Brooklyn), San Francisco, San Mateo and Alameda counties in the San Francisco metro area, Suffolk County in the Boston metro area, Orange County in Southern California, Honolulu County, Hawaii, Denver County, Colo., Washington County, Utah in the St. George metro area, and Deschutes County, Ore., in the Bend metro area.

“With the stiff competition for homes in Seattle, one might think that our market is well on its way to a bubble, but buyers have gotten more savvy and aren't overbidding at levels we saw a year or two ago,” said OB Jacobi, president of Windermere Real Estate, covering the Seattle market. All three counties in the Seattle metro were more affordable than their historical levels in October despite a slight increase in foreclosure rate in two of the three counties. “We also have a strong job market with wages that are keeping up with appreciation — especially in the growing tech sector. As a result, prices in Seattle are appreciating at a healthy pace, but they've slowed from the double digit increases we saw last year.”