U.S. housing markets most vulnerable to downturns this summer were concentrated in California, Florida, New Jersey, and Louisiana, according to ATTOM’s second-quarter 2025 Housing Risk Report. The analysis, which ranks county-level risk based on affordability, mortgage stress, foreclosure activity, and unemployment, found that 21 of the 50 riskiest counties were in the South.
California alone accounted for 14 of the highest-risk markets, followed by Florida with seven, New Jersey with five, and Louisiana with four. At the other end of the spectrum, the healthiest markets were spread evenly between the South and Northeast, each with 18 counties in the least-risky cohort.
Affordability Squeeze
Nationwide, owning a median-priced home consumed 33.7% of the average household’s annualized wages in the second quarter. In some coastal and resort markets, however, costs far outstripped local pay. Home expenses required 119.7% of annual wages in Marin County, California, 116.1% in Santa Cruz County, 111.5% in Maui County, Hawaii, and 109% in Kings County, New York.
Overall, 63% of the 579 counties analyzed required residents to spend at least a third of annual wages on housing, and 111 counties — about 19% — required half or more.
“This summer’s home prices were certainly eye-catching, but there are many factors that contribute to the health of a local housing market,” ATTOM Chief Executive Officer Rob Barber said in a statement. “Our index takes into account key indicators beyond just sales price to create a barometer that helps folks better understand where their market is headed.”
Foreclosures and Unemployment
The riskiest individual counties combined above-average foreclosure and unemployment pressures. Charlotte County, Florida; Humboldt and Shasta Counties in California; Butte County, California; and Cumberland County, New Jersey ranked at the top of ATTOM’s list. All five posted June unemployment rates above the U.S. average of 4.36% and foreclosure ratios worse than one in every 766 homes.
Foreclosure actions nationally affected one in every 1,413 homes during the quarter. The highest rates were in Dorchester County, South Carolina (one in 355), Charlotte County, Florida (one in 372), and Oswego County, New York (one in 427).
Unemployment remained a dividing line. About 35% of counties posted June jobless rates above the national 4.4% level. Imperial County, California led with a 19% unemployment rate, followed by Yuma County, Arizona at 15.2% and several Central Valley counties above 10%.
Louisiana Struggles With Negative Equity
Mortgage stress was particularly acute in Louisiana, which accounted for seven of the 10 counties with the highest shares of seriously underwater properties. In Rapides Parish, 17.3% of homes carried loan balances at least 25% above market value, with similarly elevated levels in Calcasieu, Caddo, Tangipahoa, and East Baton Rouge Parishes. Nationally, just 2.7% of homes were underwater.
Least-Risky Counties
Counties with the strongest fundamentals featured low unemployment, minimal foreclosure activity, and healthier balance sheets. Chittenden County, Vermont posted the lowest foreclosure ratio nationwide — one in every 37,013 homes — and just 0.5% of mortgages underwater. Other low-risk markets included Potter County, Texas, Erie County, New York, and Madison County, Alabama, where homeownership costs consumed less than 26% of local wages.
“Prices have been climbing for years, and there’s uncertainty about how long they can keep going up — and what happens when they don’t,” ATTOM’s Barber said. “That can be unnerving for owners and buyers who don’t always see the full picture of their market.”
