The housing market hasn’t exactly settled down in the handful of years since the pandemic—and those looking to purchase a home have had to keep a close eye on the markets they can turn to, and the ones they should avoid.
ATTOM’s Q3 2025 U.S. Housing Risk Report examines which markets have been most volatile for housing—the markets homebuyers looking to settle should possibly circumvent—based on key factors such as affordability, the share of seriously underwater mortgages, foreclosure activity and county unemployment rates.
Rob Barber, ATTOM CEO, said that a lot of attention has been directed toward rising home prices, but “what really separated the riskiest markets in our third quarter assessment were their high rates of foreclosures and unemployment.”
Unemployment especially has been of note as of late for the U.S. as a whole, as eyes remain on recent jobs reports in order to gauge future decisions from the Federal Reserve’s Federal Open Market Committee regarding interest rates.
“If a community is losing jobs, those homeowners will find it harder to pay their monthly mortgage bills,” noted Barber. “That means more foreclosures, which can hurt the broader local housing market.”
Of the 50 highest-risk markets identified by ATTOM, 16 were located in California, denoting the state’s high-priced nature. Of the top five riskiest markets, four are located within the state, with an additional two markets in the top 10.
New Jersey, another well-known high-priced state, was a leader on the risky market list with nine spots, including two in the top 10. Florida markets held three spots on the list, while Arizona and Texas each had three.
Here are the top five riskiest housing markets:
- Butte County, California
48.6% of income needed to buy
4% of properties underwater
1 in every 735 properties with foreclosure filings
6.8% July 2025 unemployment rate
- Humboldt County, California
50.2% of income needed to buy
3.1% of properties underwater
1 in every 803 properties with foreclosure filings
6.1% July 2025 unemployment rate
- Charlotte County, Florida
39.1% of income needed to buy
7% of properties underwater
1 in every 499 properties with foreclosure filings
5.1% July 2025 unemployment rate
- Shasta County, California
39.4% of income needed to buy
3.6% of properties underwater
1 in every 532 properties with foreclosure filings
6% July 2025 unemployment rate
- El Dorado County, California
65.8% of income needed to buy
2.6% of properties underwater
1 in every 806 properties with foreclosure filings
5.4% July 2025 unemployment rate
ATTOM also identified some of the least risky housing markets as of Q3, where there was more affordable housing and stable job markets for homebuyers to seek out a place to settle down.
Of the 50 least risky markets, seven were in Wisconsin, five were in Tennessee, and four each were in Montana, New Hampshire and Virginia. It’s also important to note that while New York doesn’t claim a notable amount of spots on the list, it does hold two spots in the top five.
The least risky counties were Berkeley County, West Virginia; Chittenden County, Vermont; Erie County, New York; Olmsted County, Minnesota; and Albany County, New York. ATTOM reported that all five markets had unemployment rates at or below 4%, and a foreclosure rate of, at most, one in every 2,624 properties.
