The Counties Most at Risk of Declining Housing Markets

Last month, ATTOM, a leading provider of housing intelligence, published its list of the counties at greatest risk of declining housing markets in the fourth quarter of 2025. And Florida overtook California as the state posing the greatest threat to homeowners.

ATTOM based its findings on several criteria, namely the:

1. Percentage of homes facing possible foreclosure
2. Portion with seriously underwater mortgages (owners owed 25% or more on their mortgages than the market value of their homes)
3. Percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes
4. Local unemployment rates

For homeowners, those are the four horsemen of the apocalypse. And the riders relocated to Florida from California at the end of last year.

The Counties Most at Risk

Of the 50 riskiest counties, 30 were in just three states:

• 16 in Florida
• 11 in California
• 4 in New Jersey

ATTOM identified the five counties most vulnerable to housing decline as:

1. Charlotte County, FL
2. Charles County, MD
3. Butte County, CA
4. Saint Lucie County, FL
5. Atlantic County, NJ

The Least Affordable Counties

Affordability is a challenge nationwide at the moment. But a county can become particularly vulnerable to housing market problems when buying and maintaining (including property taxes and homeowners insurance) its homes eat up a large proportion of its residents' incomes.

According to ATTOM, the five least affordable counties nationwide in Q4/25 were:

1. Kings County, NY (103.1 percent of the typical resident’s wages to buy and maintain a home)
2. Marin County, CA (97.3 percent)
3. Santa Cruz County, CA (94.4 percent)
4. Orange County, CA (90.3 percent)
5. Monterey County, CA (90.3 percent)

Counties With the Most Seriously Underwater Homes

1. Calcasieu Parish (17.3 percent of homes seriously underwater)
2. Ouachita Parish (13.8 percent)
3. Rapides Parish (13.8 percent)
4. East Baton Rouge Parish (12.5 percent)
5. Caddo Parish (11.7 percent)

There's a glimmer of hope for Louisiana residents facing foreclosure. "Before the foreclosure crisis, federal and state laws regulating mortgage servicers and foreclosure procedures were relatively limited and tended to favor foreclosing lenders," says an attorney writing for NOLO. "However, many federal and Louisiana foreclosure laws now better protect borrowers. Servicers generally must provide borrowers with loss mitigation opportunities, account for each foreclosure step, and carefully comply with foreclosure laws."

Counties With the Highest Foreclosure Rates

Florida again heads a most-threatened list. Fifteen of the 50 counties with the highest foreclosure rates were in the state.

The counties with the highest foreclosure rates were:

1. Dorchester County, SC (one in every 294 homes in foreclosure)
2. Baltimore City, MD (one in every 321 homes)
3. Pueblo County, CO (one in every 329 homes)
4. Charlotte County, FL (one in every 348 homes)
5. Osceola County, FL (one in every 360 homes)

Counties With the Highest Unemployment Rates

Florida came in second, behind California, for unemployment. Of the 50 counties with the highest unemployment rates, 15 were in California, 13 in Florida, and three in New Jersey.

The five counties with the highest unemployment rates were:

1. Imperial County, CA (20.1%)
2. Yuma County, AZ (13.4%)
3. Tulare County, CA (10%)
4. Merced County, CA (9%)
5. Sumter County, FL (8.9%)

In places with many unemployed homeowners, the risks of late mortgage payments, defaults and foreclosure are elevated. And, if enough are being forced to sell, that can lower home prices and raise the threat of more homes being underwater.

Final Thoughts