Housing market risk remained concentrated in parts of Florida and California during the first quarter of 2026, according to ATTOM's latest Housing Risk Report, which found that unemployment and foreclosure activity were the strongest indicators of vulnerability among U.S. housing markets.
The property data and analytics firm analyzed 580 counties nationwide, ranking them based on foreclosure activity, the share of seriously underwater mortgages, housing affordability, and unemployment rates.
Risk was heavily concentrated in a handful of states:
- Florida accounted for 12 of the 50 highest-risk counties.
- California had 9.
- Illinois and New Jersey each had 5.
The counties ranking highest overall were Charlotte County, Fla.; Butte County, Calif.; Charles County, Md.; Shasta County, Calif.; and Cumberland County, N.J.
"While home prices have eased slightly from last summer's record highs, affordability remains a challenge in much of the country," said Rob Barber, CEO of ATTOM. "The greatest risk remains in counties where unemployment rates are above 5 percent, and homes are being foreclosed at greater rates."
Foreclosures, Unemployment Drive Risk
ATTOM's analysis found that the riskiest housing markets generally shared elevated foreclosure rates and higher-than-average unemployment levels, even as affordability challenges persisted nationwide.
Counties were evaluated based on:
- The percentage of homes facing possible foreclosure
- The share of properties with seriously underwater mortgages
- The percentage of local wages needed to cover ownership costs on a median-priced home
- Local unemployment rates
Foreclosure activity remained elevated in several local markets despite a national foreclosure rate of one filing for every 1,211 homes.
Highest foreclosure rates:
- Liberty County, Texas (1 in 55 homes)
- Baltimore City, Md. (1 in 294)
- Dorchester County, S.C. (1 in 352)
- Kaufman County, Texas (1 in 361)
- Pueblo County, Colo. (1 in 368)
Labor market weakness also emerged as a common characteristic among higher-risk housing markets.
Highest unemployment rates:
- Imperial County, Calif. (17.6%)
- Yuma County, Ariz. (11.7%)
- Tulare County, Calif. (11.5%)
- Merced County, Calif. (10.9%)
- Monterey County, Calif. (10.8%)
Affordability Remains A National Challenge
Housing affordability continued to strain homebuyers across the country.
ATTOM reported that the national median home sales price reached $360,000 during the first quarter. Major ownership expenses on a median-priced home consumed 30.3% of the typical American worker's annual wages.
The least affordable housing markets remained heavily concentrated in New York and California.
Markets requiring the largest share of local wages to cover ownership costs:
- Kings County, N.Y. — 108.6%
- Santa Cruz County, Calif. — 97.1%
- Marin County, Calif. — 91.1%
- San Luis Obispo County, Calif. — 89.7%
- Orange County, Calif. — 88.1%
Louisiana Leads In Underwater Mortgages
Nationwide, 3.2% of homes were classified as seriously underwater, meaning outstanding loan balances exceeded estimated property values by at least 25%.
Louisiana accounted for the five counties with the highest shares of underwater mortgages:
- Ouachita Parish (17.4%)
- Calcasieu Parish (17.1%)
- Tangipahoa Parish (15%)
- Ascension Parish (14.5%)
- Rapides Parish (13.2%)
Tennessee, Virginia Among Safest Markets
Housing market strength was concentrated in several Midwestern and Northeastern markets.
On the opposite end of the spectrum, Tennessee accounted for nine of the nation's 50 least risky counties. Virginia and Wisconsin each had five counties on the list, while Michigan had four.
The five least risky counties overall were:
- Chittenden County, Vt.
- Rutherford County, Tenn.
- Arlington County, Va.
- Tippecanoe County, Ind.
- Cumberland County, Maine
According to ATTOM, these markets were distinguished less by affordability and more by strong employment conditions, low foreclosure activity, and relatively small shares of underwater mortgages.
The report concludes that while affordability remains a persistent national concern, local labor market conditions and foreclosure activity continue to be the strongest indicators of housing market vulnerability heading into the remainder of 2026.
