New York City, Chicago, and Washington, DC, are among the biggest markets facing the highest risk of a housing downturn due to a range of economic factors, a new study shows.
The latest Special Housing Risk Report from ATTOM Data Solutions, a curator of land, property data, and real estate analytics, reveals that two-thirds of the 50 counties deemed most vulnerable to possible housing market declines based on an array of factors, including gaps in affordability and equity, were clustered in California, Illinois, Florida, and the New York City region in the fourth quarter of 2024.
Other economic factors could include foreclosures, underwater mortgages, and unemployment.
And while many counties in the South were assessed to be low-risk markets, Washington, DC, stood out for being one of the most vulnerable in that region at the end of last year.
Notably, the data used in ATTOM’s report predates the mass firings of federal workers that the Elon Musk–helmed U.S. Department of Government Efficiency, or DOGE, has been carrying out since the end of January.
“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,” stated ATTOM CEO Rob Barber.
Barber noted, however, that “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.”
For example, a typical homeowner in Monongalia County, WV, spent the smallest share of their wages on homeownership expenses, at just 23.8%, well below the 30% affordability benchmark.
Meanwhile, in 49 least at-risk counties, less than 6% of mortgages were underwater, with Chittenden County, VT, seeing the lowest share, at only 0.9%.
Vermont’s most populous county, which is home to Burlington, incidentally also had the second-lowest foreclosure rate, just behind Cumberland County, PA, where 1 in 36,385 properties faced possible foreclosure.
“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,” concluded the ATTOM analysis.
