Nearly half of the 51 counties in the U.S. that are considered most exposed to housing risk are in three states: California, New Jersey and Illinois. These counties tend to have a higher percentage of homes facing possible foreclosure, mortgage balances greater than the value of the property, lower average annual wages, and higher local unemployment rates.

These are the findings of a new Special Housing Risk report released by ATTOM based on an analysis of 589 counties in 2Q 2024. The housing market continues to gain momentum, the report notes, but some markets show signs of potential instability. "While these observations don't indicate immediate red flags or warning signs of an impending downturn, they do highlight areas of relative risk. With the housing market still facing challenges, it's crucial to closely monitor regions where key indicators suggest a higher likelihood of issues," said Rob Barber, CEO of ATTOM.

These indicators point to seven counties in and around New York City, five in the Chicago metropolitan area, and 12 in California as at high risk. The remaining 26 counties are sprinkled around the South, the Midwest and the Northeast. Those with the least risk are concentrated in the Washington, DC, Richmond and Nashville metros.