Massive markets feature near the top of the list
A new housing report from ATTOM indicates that housing markets in California, Illinois, and the New York City region are among the most vulnerable to potential declines in the United States based on Q4 2024 data.
Florida also had several counties ranked as at-risk, while areas in the Midwest, Northeast, and South showed mixed levels of exposure.
The analysis evaluated 566 counties across the country based on four criteria: home affordability, the percentage of underwater mortgages, foreclosure rates, and local unemployment figures.
Counties with the lowest combined rankings were considered the most vulnerable to market downturns, while those with the highest ranks were viewed as the least at risk.
According to the report, two-thirds of the 50 most vulnerable counties were located in California, Florida, Illinois, and the New York City area. In contrast, Wisconsin, Virginia, Tennessee, and Pennsylvania accounted for nearly half of the 51 counties considered least exposed to market declines.
In Illinois, five of the most at-risk counties were in and around Chicago, while four were located in or near New York City.
California had 14 vulnerable counties, including regions in Northern, Central, and Southern California.
Florida’s seven most exposed counties were spread across the state, including areas outside Tampa and Gainesville.
Counties considered less susceptible to market declines were widely distributed.
Wisconsin had eight of the least at-risk counties, including those near Green Bay and Madison.
Tennessee had six, with three located in the Nashville metropolitan area. Other lower-risk areas included counties near Washington, DC, and several in Pennsylvania.
The report shows that in 28 of the 50 most vulnerable counties, homeownership expenses on median-priced single-family homes required at least 43% of average local wages. Nationally, this figure stood at 34%. Kings County (Brooklyn), NY, led the list, where these costs accounted for 106.5% of local wages.
Additionally, more than 6% of residential mortgages were underwater in 29 of the most at-risk counties, surpassing the national average of 5.7%. Pasco County, FL, reported the highest share, with 15.8% of mortgages exceeding property values.
Foreclosure rates were also elevated in vulnerable areas, with Charlotte County, FL, recording one in 198 properties facing a foreclosure action.
Unemployment rates in 25 of the 50 most at-risk counties were at least 5%, compared to the national rate of 4.2%.
The highest figures were observed in California, including Kern County and Kings County, where unemployment reached 7.9%.
ATTOM CEO Rob Barber noted that while local market conditions fluctuate, certain regions consistently show increased risk due to affordability challenges, foreclosure levels, and negative equity.
With rising mortgage rates and ongoing affordability concerns, the report suggests that housing markets across the country remain uneven in their exposure to potential downturns.
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