These housing markets face the greatest risk of decline

A new look at the country's most at-risk housing markets finds Florida and California leading all states in the number of counties vulnerable to declines. 

Florida communities made up 16 out of the "leading" 50 markets on the list, according to the latest housing risk report from real estate intelligence platform Attom. The Sunshine State surpassed California for the most vulnerable counties in the fourth quarter, with the latter accounting for 11.  

Attom looked at a host of risk factors in its rankings, including current properties with foreclosure filings, the share of underwater mortgages, regional employment and local wages relative to major homeownership expenses. 

"Foreclosure and unemployment rates have been rising year-over-year. Even as foreclosure activity normalizes, markets where prices remain high, foreclosures are rising and employment is weakening may face greater risk," Attom CEO Rob Barber said in a press release.  

In 55.7%, or 331 out of 594, counties with sufficient data to research, Attom found a typical resident would need at least one-third of annual wages to cover a home purchase and primary monthly costs. In 15% of counties, a homeowner would need more than half of their income to properly maintain a median-priced property. 

Housing experts generally consider homeownership as unaffordable when borrowers must allot above 30% of annual income. 

Driving up housing risk are still-rising prices, with the median U.S. home hitting $365,185 toward the end of 2025, according to Attom's data.

"As home prices softened slightly in the fourth quarter, they remain historically high, keeping affordability a challenge for many buyers," Barber said. 

The riskiest and safest markets

Charlotte County, Florida, which is home to Punta Gorda, ranked as the most at-risk market in the country. Counties in Florida took two out of the top five spots in Attom's research, with the state now outpacing prior leader California for the dubious honor of most at-risk counties.

The counties on top were characterized by particularly high foreclosure and unemployment rates, Attom said. The prevalence of Atlantic hurricanes striking Florida and California wildfires also are resulting in surging insurance costs and homeowners' association fees in the two states, which, in turn, have driven up housing costs. 

When looking at the housing costs alone, a homeowner needs 103.1% of average annual wages for housing payments in Kings County, New York, more commonly known as Brooklyn. The New York borough was followed by four California counties, where residents would require between 90% and 98%. 

Underwater mortgage data showed 3% of borrowers whose outstanding balances are at least 25% higher than the current value of their homes. The five counties with the greatest share of underwater homeowners were in Louisiana, where between 11% and 18% of borrowers find themselves in such distress. 

On the other side of the coin, Midwest markets appear to be the least vulnerable in the country, thanks primarily to low levels of unemployment and foreclosure, the report said. Nine of the least at-risk counties can be found in Wisconsin.

Coming out as the least at-risk area, though, was Olmsted County, Minnesota, followed by Tippecanoe County, Indiana.