Southern counties, especially in Florida, topped a list of local housing markets most vulnerable to declines from economic shocks at the end of 2025, conditions created by a matrix of intertwined factors like softening home equity levels and unstable job market conditions.

Released Wednesday, a new housing risk report from Attom paints a picture of persistent affordability challenges impacting current and prospective homeowners — even as home price gains have cooled and median new mortgage payments were around $135 lower than a year ago in January.

Charlotte County, Fla., just north of the city of Cape Coral, was the overall riskiest market in Attom’s analysis, followed by Charles County, Md., just south of Alexandria, Va., and Butte County, Calif., the epicenter of the devastating 2018 Camp Fire in the town of Paradise and surrounding areas.

Attom compiled the ranking by indexing home prices, foreclosure rates, wages and employment rates for 549 counties across the country, excluding Connecticut, that the real estate analytics firm says has sufficient data to analyze. The U.S. has more than 3,000 counties and county equivalents.

In almost 56% of examined counties during the fourth quarter, a typical resident would have spent at least one-third of their annual wages to cover the purchase and major monthly costs of a home, while in 15% of counties residents spent half of their wages on those expenses.

“As home prices softened slightly in the fourth quarter, they remain historically high, keeping affordability a challenge for many buyers,” said Rob Barber, CEO at Attom. Federal Housing Finance Agency data shows nine states and Washington, D.C., posted annual declines in the fourth quarter of last year, led by a 2.7% drop in Florida home prices.

Attom pegs the national median home sales price at $365,185 in the fourth quarter, almost $10,000 less than the third quarter but “still one of the highest typical sales prices recorded.”

“Foreclosure and unemployment rates have been rising year over year,” added Barber. “Even as foreclosure activity normalizes, markets where prices remain high, foreclosures are rising and employment is weakening may face greater risk.”

In the fourth quarter, the riskiest markets based on those factors were concentrated in Florida, where 16 of the 50 county-level markets most vulnerable to decline were located. California claimed 11 of the 50 riskiest markets while New jersey claimed four.

Weakness appeared to be concentrated in Florida through the second half of the year, as the state only had seven of the riskiest markets in the second quarter of last year, at which point California claimed 14.

Counties were considered more or less at risk based on local jobless rates, the share of homes facing potential foreclosure, the percentage with seriously underwater mortgages, and the percentage of typical local wages needed to pay for major homeownership expenses on median-priced single-family homes.

The national unemployment rate hovered around 4.5% in the fourth quarter, but Attom says that among the 50 counties with the highest unemployment rates, 15 were located in California, 13 were located in Florida and three were in New Jersey.

With approximately 1 out of every 1,274 homes nationwide facing foreclosure in the fourth quarter, 14 of the 50 counties with the worst foreclosure rates were in Florida, eight were in South Carolina and five were in New Jersey. Foreclosures filings nationwide were 14% higher in 2025 than 2024 and 3% above 2023 levels while being 25% below 2019 norms.

A separate report published by Attom in early February said that the share of equity-rich homeowners in the U.S. — those with combined loan balances not exceeding 50% of their home’s estimated market value — fell from 46.1% in the third quarter to 44.6% during the fourth quarter, its lowest level since late 2021 and below a peak of 49.2% in mid-2024.

Reflecting a normalization as the market shifts away from rapid appreciation trends from 2020 through 2022, the portion of “seriously underwater” properties — those with combined loan balances exceeding the property’s estimated market value by at least 25% — rose to 3% in the fourth quarter, up slightly from 2.8% during the prior quarter.

Overall, purchase costs and major monthly expenses for a median-priced home would have consumed about 31.4% of the typical worker’s annual wages at the end of last year, Attom noted in Wednesday’s housing market risk report.