#United States #California #Housing Market #ATTOM #California, New Jersey

Overview of Housing Market Risks

In a recent release, ATTOM, a prominent provider of property data and real estate analytics, published its Special Housing Risk Report. The findings spotlight various counties across the United States and their vulnerabilities regarding declining housing markets. The report features data from the first quarter of 2025, indicating significant challenges primarily in California and New Jersey.

Key Findings

ATTOM's analysis pointed out that these two states harbored the majority of at-risk counties, with California having 14 and New Jersey 9 among the top 50 identified counties. The risk levels were assessed based on several factors, including home affordability, the proportion of distressed mortgages, foreclosure rates, and unemployment statistics. Although foreclosures and severely underwater mortgages—where the property value is substantially lower than the mortgage amount—remained relatively low nationwide, the housing market still faced severe affordability challenges.

For many prospective buyers, the financial burden of acquiring a median-priced home is becoming increasingly unsustainable. Alarmingly, in 109 counties analyzed, residents would need to allocate more than half of their annual income to cover expenses related to home purchases.

Understanding the Market Dynamics

Rob Barber, CEO of ATTOM, emphasized the interconnected nature of various market forces. He remarked, "This report highlights a number of market forces that anyone with an interest in their local housing market should keep an eye on."

Analyzing the data gives insights into areas where property values are likely to decline. By examining key metrics—such as the share of homes in foreclosure, enslaved mortgages, and local wage requirements for housing—homebuyers can weigh their options more effectively.

Foreclosure and Unemployment Rates

Particularly concerning were the findings surrounding foreclosure rates: nearly 19.2% of the counties surveyed encountered foreclosure actions affecting more than one in every thousand homes in early 2025. The states showcased significant geographic disparities—leading states included Dorchester County, SC, and Johnson County, TX. The national unemployment rate recorded was 4.3%, with various counties experiencing even higher figures, such as Imperial County, CA, which reached a staggering 16.6%.

Affordable Housing Crisis

The affordability crisis was a persistent theme throughout the report. Nationwide, homebuyers were typically required to spend approximately 32.5% of their annual income to secure a home, but this rate was exceedingly higher in several locations:

• - Kings County, NY: 109.5% of a typical salary,
• - Maui County, HI: 101.5%,
• - San Luis Obispo County, CA: 100.1%.

These figures illustrate the immense financial pressure facing potential homebuyers, particularly in major urban markets. ATTOM noted that many counties in California, as well as specific regions in New Jersey, grappled with worsening housing affordability, further exacerbating the situation.

Recommendations for Homebuyers

As the housing market operates under a cloud of uncertainty due to economic factors, including potential impacts from tariffs and federal policy changes, ATTOM's assessments provide critical insights for both homebuyers and investors. Understanding the broader economic trends along with localized housing data will be essential for making informed decisions moving forward.

Homebuyers should remain vigilant about the shifting dynamics of their local markets. Assessing affordability relative to wage growth and keeping track of foreclosure rates will equip them better for navigating this complex landscape.

In sum, while California and New Jersey dominate the list of high-risk counties, areas across the United States are grappling with varying degrees of housing market challenges. Potential buyers are urged to stay informed and evaluate risk factors carefully as they plan their home purchases.