A new report from ATTOM Data spotlights areas of the country that are vulnerable to decline based on affordability and equity measures gathered during Q4 2024. The report found that California, Illinois, New York City and parts of Florida were at the highest risk for the measured time period, with less vulnerable markets clustered in areas not encompassed by the Northeast, Midwest or South.
Of the 50 counties considered most exposed to potential fallbacks, two-thirds were located in California, Illinois, New York City and Florida. Criteria used to determine these fourth quarter patterns included gaps in affordability, underwater mortgages, foreclosures and unemployment—all indications of economic hardship or burden.
The county-level housing markets most at risk were clustered in and around Chicago, Illinois; New York City, New York; and included seven scattered across Florida alongside a notable 14 located in California, mostly inland from the Pacific Coast, the report stated.
Nearly half of all the markets considered least likely to decline were located in Tennessee, Virginia, Wisconsin and Pennsylvania. They included four in the Washington, D.C., area, along with three each in Nashville, Tennessee, and Richmond, Virginia, the report noted.
The 14-year housing boom has resulted in price to wage disparities that show varying degrees of affordability scattered throughout the country. This dynamic has led to homeownership costs that consume more than triple the portion of average wages in some parts of the country versus others where affordability is less severely impacted. Similar disparities can be found in the other key measures utilized for the report: unemployment rates, level of homeowners facing foreclosure and the portion of homeowners with a mortgage considered underwater (mortgages with a value that exceeds the total value of the property for which they are mortgaged).
“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 ATTOM CEO Rob Barber. “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.”
The report studied 566 counties with sufficient data in sum for Q4 2024, and as noted in the report, the various risk disparities tracked in these counties could either cool the housing market or further spur the housing boom. The rise in unaffordability threatens the accompanying rises in home values seen over the past 14 years. However, the report also notes that low inventory and a favorable investing environment also serve to give ample energy to further price spikes.
It would seem that the market itself is conflicted between the dim prospect of affordability and the greater yields that affordability can give on the other end of homeownership as an investor. However, the metrics tracked by ATTOM should serve as a stark reminder that the aggregate picture must still be considered in order for the market to function for both of these groups. In the 50 counties where the four factors tracked by ATTOM were most glaringly out of place, the market is at greatest risk.
Metros around Chicago, Illinois; New York City, New York; and large regions of California contained 23 out of the 50 counties considered most vulnerable to housing market difficulties.
The most at-risk among these 50 counties were Cook, Kane, Kendall, McHenry and Will counties of Illinois; Kings County (Brooklyn), New York; Richmond County (Staten Island), New York; Essex County, New York’ and Passaic County, New York.
The 14 California counties included Butte County (Chico); Contra Costa County (outside Oakland); El Dorado County (outside Sacramento); Humboldt County (Eureka); Shasta County (Redding); Solano County (outside Sacramento) in the Northern portion of the state; Fresno County, Kern County (Bakersfield); Kings County (outside Fresno); Madera County (outside Fresno); San Joaquin County (Stockton) and Stanislas County (Modesto) in the Central portion of California. Two other counties, Riverside and San Bernardino, hailed from Southern California.
Other counties considered very vulnerable included three in the Washington, D.C. metro: D.C. County along with Charles County, Maryland; and Prince George’s County, Maryland; and seven in Florida: Charlotte County (Punta Gorda); Hernando County (Spring Hill); Lake County (Clermont); Marion County (outside Gainesville); Pasco County (outside Tampa); Polk County (Lakeland) and St. Lucie County (Port St. Lucie).
On the other hand, 23 of the 51 counties considered least at risk for housing difficulties were located in the South. This was followed by 13 counties each in the Northeast and the Midwest, and another two located in the Western region of the U.S.
Wisconsin contained eight of the least at risk counties tracked in Q4: Brown County (Green Bay); Outagamie County (outside Green Bay); Dane County (Madison); Rock County (outside Madison); Eau Claire County; La Crosse County; Washington County (outside Milwaukee) and Winnebago County (Oshkosh).
Tennessee was home to six such (least risk) counties: Davidson, Rutherford and Williamson counties in the Nashville metro area; Knox County (Knoxville); Sullivan County (Kingsport) and Washington County (Johnson City). Five of the least at risk counties were located in Pennsylvania: Cumberland and Dauphin counties in the Harrisburg metro area; Erie County, Lebanon County and Lehigh County in the Allentown metro.
Statistically speaking, major homeownership costs (mortgage payments, property taxes and insurance) on median single-family homes and condos were considered seriously unaffordable in 28 out of 50 counties considered most vulnerable to market drop-offs in Q4 2024. The “seriously unaffordable” benchmark was defined as 43% of local wages being consumed by such costs, according to ATTOM.
Nationwide, set against the backdrop of the unaffordable markets, major expenses on typical homes consume 34% of average local wages, a figure that also exceeds the average affordability benchmarks.
The counties with the highest expenses, expressed as a percentage of local average wages, include Kings County (Brooklyn), New York (106.5% of average local wages needed to cover the three major expenses of mortgage payments, property taxes and insurance); Riverside County, California (70.4%); Passaic County, New Jersey (outside New York City) (69.4%); Richmond County (Staten Island), New York (67.6%) and El Dorado County, California (outside Sacramento) (66.5%).
More than 6% of residential mortgages were considered underwater in Q4 2024 for 29 of the 50 highest risk counties for drop offs. This is in the perspective of a 5.7% average of residential mortgages nationwide. For these 50 counties, those with the highest rates of underwater mortgages were Pasco County (Tampa), Florida (15.8% underwater); Baltimore City/County, Maryland (15.3%); Orleans Parish (New Orleans), Louisiana (14%) and Charlotte County (Punta Gorda), Florida (14%).
More than one out of every 1,000 properties was presented with a foreclosure action in Q4 2024 in 37 out of the 50 most vulnerable counties. This compared with one in 1,671 homes nationwide that face a similar situation. Among the 50 counties with the greatest risk of value loss, those with the highest foreclosure rates were in Charlotte County (Punta Gorda), Florida (one in 198 properties facing foreclosure); Cumberland County (Vineland), New Jersey (one in 484); Kaufman County, Texas (one in 562); Madera County, California (one in 631) and Shasta County, California (one in 664).
The November 2024 unemployment rate hit the 5% threshold in 25 out of the 50 counties considered most likely to have difficulty compared to 4.2% nationwide. Counties with the highest unemployment rates were Kern County (Bakersfield), California (7.9%); Kings County, California (7.9%); Fresno County, California (7.8%); Madera County, California (7.3%) and Stanislaus County, California (6.7%).
For the full report, click here.
