Revealed – the most vulnerable housing markets in the US

Areas in the South, meanwhile, had the highest concentration of markets least vulnerable to housing market declines.

“While the housing market has been exceptionally strong over the past few years, that doesn’t mean there aren’t areas of potential vulnerability if economic conditions continue to weaken,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “Housing markets with poor affordability and relatively high rates of unemployment, underwater loans, and foreclosure activity could be at risk if we enter a recession or even face a more modest downturn.”

ATTOM determined its rankings based on the percentage of homes facing possible foreclosure, the portion with mortgage balances exceeding estimated property values, the percentage of average local income required to cover home ownership expenses, and local unemployment rates.  

“The housing market has been one of the strongest components of the US economy since the onset of the COVID-19 pandemic,” added Sharga. “But Federal Reserve actions aimed at bringing inflation down from its 41-year high are having an immediate impact on home affordability, sales, and pricing. Whether the Fed can execute a relatively soft landing, or inadvertently steers the economy into a recession will determine the fate of the housing market over the next 12-18 months.”