Realtor.com, ATTOM flag counties with least resilient housing markets
A common assumption is that the biggest housing risk in 2026 is a market crash similar to the devastation that wiped out trillions in home equity in 2008.
The actual danger looks very different, concentrated in specific counties where foreclosure activity, unemployment, and affordability pressure have been building for months.
Property data firm ATTOM just released a county-level housing risk report flagging dozens of vulnerable markets across Florida, California, Illinois, and New Jersey.
ATTOM data reveal where housing risk runs deepest
ATTOM's first quarter 2026 Housing Impact Report ranked 580 counties on four measures: foreclosure activity, home affordability, underwater mortgage rates, and local unemployment levels.
Of the 50 counties flagged as most at risk, 12 were in Florida, nine were in California, and Illinois and New Jersey each had five. Charlotte County in Florida, Butte County in California, and Charles County in Maryland topped the composite risk rankings for the quarter.
These vulnerable counties shared two defining traits: unemployment rates above 5% and among the steepest foreclosure rates recorded anywhere in the country.
"The greatest risk remains in counties where unemployment rates are above 5%, and homes are being foreclosed at greater rates," ATTOM's Rob Barber confirmed, according to Realtor.com.
Barber, who serves as the property data firm's chief executive, added that home prices have eased only slightly from last year's record highs.
Foreclosure filings jump 26% as ownership costs squeeze homeowners
A total of 118,727 properties recorded at least one foreclosure filing during the first quarter of 2026, according to ATTOM's foreclosure market report.
That figure represented a 6% increase from the prior quarter and a 26% jump compared with the same three-month period one year earlier.
New foreclosure starts climbed 20% on a year-over-year basis to 82,631 properties, while bank repossessions surged 45% to 14,020 homes reclaimed by lenders.
Despite the acceleration, overall volumes remain far below the levels recorded during the foreclosure crisis.
While home prices have eased slightly from last summer's record highs, affordability remains a challenge in much of the country.
Industry analysts have attributed the increase to growing financial pressure from higher mortgage rates, insurance costs, property taxes, and general household expenses rather than systemic lending failures, according to HousingWire.
Nationally, one in every 1,211 housing units had a foreclosure filing during the first quarter, with Indiana, South Carolina, and Florida leading in filing rates.
Realtor.com warns that affordability gaps and the lock-in effect pose a lasting drag
Realtor.com senior economist Hannah Jones told Newsweek that three structural headwinds will continue weighing on housing market activity.
The lock-in effect, which discourages homeowners who secured low pandemic-era mortgage rates from selling, continues to limit available inventory across much of the country.
The 30-year fixed mortgage rate averaged 6.48% as of the first week of June, according to Freddie Mac data, down from 6.85% one year earlier, but still well above pre-pandemic levels.
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That rate continues to price out median-income households in large portions of the country, particularly along the coasts and in several Sun Belt metros where prices surged during the pandemic.
"The typical home remains out of reach for many median-income earners," Jones said, adding that affordability gaps have forced price corrections in the most overheated markets.
Sluggish new home construction has also failed to close a supply deficit rooted in the building slowdown that followed the 2008 financial crisis.
Coastal counties face the widest affordability gaps in ATTOM's analysis
ATTOM found that the national median home sales price was $360,000 in the first quarter of 2026, with major ownership costs consuming 30.3% of typical workers' wages.
The least affordable county was Kings County in New York, where ownership expenses would absorb a staggering 108.6% of a local resident's typical annual earnings.
Santa Cruz County and Marin County in California followed closely, with ownership costs consuming 97.1% and 91.1% of local wages, respectively, the report confirmed.
Additionally, 3.2% of homes nationally were classified as seriously underwater, meaning outstanding loan balances exceeded estimated market values by at least 25%, a threshold that industry analysts consider a key distress signal.
Louisiana parishes dominated that category, with Ouachita Parish leading at 17.4% and Calcasieu Parish at 17.1% of homes carrying deeply negative equity positions.
Tenn., Va., Wis. counties emerge as most insulated from housing risk
The ATTOM report also identified the counties least vulnerable to housing market declines, and the geographic pattern ran directly counter to the risk concentration.
Nine of the 50 lowest-risk counties were in Tennessee, with five each in Virginia and Wisconsin, and four in Michigan, rounding out the most resilient tier.
Chittenden County in Vermont, Rutherford County in Tennessee, and Arlington County in Virginia earned the strongest composite safety scores among the 580 markets analyzed.
These safer counties were not significantly more affordable, but they had some of the lowest unemployment and foreclosure rates tracked anywhere in the country, reinforcing the local nature of housing market health.
Low shares of underwater mortgages further distinguished these resilient markets, providing homeowners in those regions with a meaningful equity cushion against broader volatility.
Taken together, the data from both ATTOM and Realtor.com underscore how local conditions are now driving housing market health, with county-level economic indicators proving more predictive than any single national metric.
Related: Zillow, Realtor.com uncover best time to sell home
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This story was originally published June 8, 2026 at 6:17 PM.