Housing Markets Facing Greater Risk of Downturns
California, Illinois, Florida, and New York City Area Lead the Way
by ATTOM Staff
ATTOM, a leading curator of land, property data, and real estate analytics, released its latest Special Housing Risk Report spotlighting county-level housing markets around the United States that are more or less vulnerable to declines, based on home affordability, equity and other measures in the fourth quarter of 2024. The report shows that California, Illinois, and the New York City area had high concentrations of the most-at-risk markets in the country, with parts of Florida also in that mix.
The fourth-quarter patterns – derived from gaps in affordability, underwater mortgages, foreclosures and unemployment – revealed that two-thirds of the fifty counties around the U.S. considered most exposed to potential fallbacks were in California, Florida, Illinois and the New York City region.
At the other end of the exposure spectrum, roughly half the markets considered least likely to decline fell in Wisconsin, Virginia, Tennessee and Pennsylvania. They included four in the Washington, DC, area and three each in the Nashville, TN, and Richmond, VA, regions.
As with earlier periods over the past few years, the latest gaps continued trends resulting from the nation’s 14-year housing-market boom, along with the broader economy, affecting different parts of the country in different ways.
The ongoing rise in home prices around much of the nation has outpaced most wage gains around the country to varying degrees. That has led to home ownership costs consuming more than triple the portion of average wages in some parts of the country compared to others. Similar disparities can be found in several other measures: unemployment rates, the level of homeowners facing foreclosure and the portion owing more on their mortgages than their homes are worth.
“Local housing markets fluctuate in and out of the lists of areas more or less exposed to declines from quarter to quarter, but some regions consistently rank among the most vulnerable due to significant gaps in key market indicators,” said Rob Barber, CEO at ATTOM. “This report isn’t meant to raise red flags or predict endless gains — it simply highlights counties experiencing more or less pressure that could influence home values, foreclosures, or homeowner equity.”
Counties were considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes and local unemployment rates.
Risk disparities remain in place across the U.S. amid market forces that could combine to cool off the nation’s housing market boom onward or spur it ever higher.
Home buyers continue to confront record-high home prices that remain widely unaffordable across the country, threatening the rise in values, while a recent increase in home-mortgage rates puts further downward pressure on prices by making ownership costs even higher.
