ATTOM Q1 2026: Where US Housing Risk Is Concentrated — Florida and California Stand Out
New map of risk for the real estate USA market: unemployment and foreclosures lead
If you track real estate USA, ATTOM’s Q1 2026 Housing Impact Report is the most actionable piece of market intelligence out this quarter. The report points to clusters of county-level vulnerability driven by rising unemployment and elevated foreclosure activity, and it names the counties and parishes where lenders, investors and buyers should exercise extra caution.
This analysis explains how ATTOM scored 580 U.S. housing markets, where the riskiest and safest counties are concentrated, and what the data means for underwriting, portfolio decisions and purchase timing. We offer practical steps for investors, mortgage servicers and prospective homeowners who need to translate these county-level signals into real-world decisions.
How ATTOM measures housing risk and what the scores mean
ATTOM created a composite risk score for each of 580 counties using four factors:
- The share of homes in foreclosure
- The percentage of mortgages that are seriously underwater (combined loan balances at least 25% above estimated market value)
- Affordability based on local wages and median home prices
- Local unemployment rates
These are not vague signals. ATTOM’s methodology flags places where credit risk, distressed inventory and affordability pressure are likely to surface as markets adapt to higher interest rates and a softer labor market. For lenders and investors, the rankings are a practical input for:
- Underwriting parameters and stress tests
- Pricing adjustments and credit overlays
- Limits on portfolio concentration by region
- Local branch, servicing and marketing strategies
In short, the index is a county-level heat map that shows where mortgage performance may weaken and where resale inventory could rise.
Where the risk is concentrated: Florida, California and a handful of Northeastern and Midwestern counties
ATTOM reports that among the 50 riskiest counties, 12 were in Florida and 9 were in California. Illinois and New Jersey each contributed five counties to the riskiest 50. The five counties that ranked highest on the composite risk score were:
- Charlotte County, Florida
- Butte County, California
- Charles County, Maryland
- Shasta County, California
- Cumberland County, New Jersey
ATTOM CEO Rob Barber said risk is focused where unemployment rates have climbed above 5% and distress indicators are elevated while prices have plateaued from 2025 peaks. That combination matters because higher joblessness and negative equity tend to translate into higher default and foreclosure rates as affordability erodes.
Why Florida and California show up so often
- Both states have large county-by-county variation in employment exposure to tourism, agriculture and energy, which makes localized unemployment spikes more likely.
- Coastal and exurban price gains from earlier cycles left many borrowers with high debt relative to wages, so affordability shocks hit harder.
From an investor perspective, these are the counties where you should scrutinize tenant demand, vacancy risk and the local business cycle. For lenders, they are the markets where tighter underwriting and active portfolio monitoring are most warranted.
Where housing risk is lowest: Tennessee, parts of the Midwest and New England
At the other end of the spectrum, ATTOM identified clusters of counties with relatively low housing risk. The five safest counties by composite score were:
- Chittenden County, Vermont
- Rutherford County, Tennessee
- Arlington County, Virginia
- Tippecanoe County, Indiana
- Cumberland County, Maine
Among the 50 least risky counties, nine were in Tennessee, and several others were in Virginia, Wisconsin and Michigan. These markets do not necessarily offer easy affordability, but they have fairly low rates of foreclosure, low shares of seriously underwater mortgages and generally lower unemployment. For capital allocators, that profile suggests stronger credit performance in a downturn and higher odds of price resiliency even if wage growth remains modest.
Affordability pressures: national median price and coastal extremes
ATTOM reports a national median home sales price of $360,000 in Q1 2026. At that price point, ATTOM calculates that major monthly ownership costs would consume 30.3% of the typical American worker’s annual wages. That is a blunt measure of how stretched the average buyer is when wages are compared with typical mortgage and ownership expenses.
Coastal and high-cost employment centers remain effectively out of reach for many median-wage households. ATTOM lists the most extreme examples of ownership costs as a share of local wages:
- Kings County (Brooklyn), NY: 108.6%
- Santa Cruz County, CA: 97.1%
- Marin County, CA: 91.1%
- San Luis Obispo County, CA: 89.7%
- Orange County, CA: 88.1%
These numbers are not academic. They mean that in places like Kings County and Santa Cruz, traditional owner-occupier demand from median-wage earners is suppressed, which supports rental demand and changes the composition of buyers toward higher-income or investor groups.
What this means for buyers and investors
- Prospective owner-occupiers earning near median wages will find purchase options limited in these coastal counties unless they have substantial down-payment resources or non-wage income.
- Investors who rely on owner-occupier demand for price support should adjust yield and exit assumptions where wages do not support typical mortgage payments.
Underwater mortgages and concentration in Louisiana
Nationwide, 3.2% of homes were seriously underwater in Q1 2026, meaning combined loan balances were at least 25% larger than estimated market value. ATTOM found the highest concentrations of seriously underwater mortgages in Louisiana, where all five top counties or parishes were located:
- Ouachita Parish: 17.4%
- Calcasieu Parish: 17.1%
- Tangipahoa Parish: 15%
- Ascension Parish: 14.5%
- Rapides Parish: 13.2%
High concentrations of negative equity raise the odds of strategic defaults and limit seller mobility. Servicers and investors holding loans in those jurisdictions should expect longer time-to-sale, heavier price concessions in a downturn, and greater sensitivity to weather-related losses in coastal or flood-prone areas.
Foreclosures and unemployment: pockets of acute stress
ATTOM reports that, nationally, one in every 1,211 homes was in the foreclosure process in Q1 2026.
- Liberty County, Texas: one in every 55 homes
- Baltimore City, Maryland: one in every 294 homes
- Dorchester County, South Carolina: one in every 352 homes
- Kaufman County, Texas: one in every 361 homes
- Pueblo County, Colorado: one in every 368 homes
At the same time, jobless rates varied dramatically across counties. The national unemployment rate was 4.4% in February, according to the Bureau of Labor Statistics, but several counties had much higher readings:
- Imperial County, California: 17.6%
- Yuma County, Arizona: 11.7%
- Tulare County, California: 11.5%
- Merced County, California: 10.9%
- Monterey County, California: 10.8%
The overlap between high unemployment and elevated foreclosure rates is the primary stress zone for servicers and warehouse lenders. Where those two factors coincide, expect more extended loss-mitigation pipelines and higher servicing expenses.
Practical guidance: what buyers, investors and lenders should do now
We translate these findings into concrete steps for each market participant.
For homebuyers and prospective owner-occupiers:
- Check county-level unemployment trends and foreclosure filings in your target market before making a bid.
- If you are buying in a high-cost coastal county, run conservative debt service calculations: market-level ownership costs are already consuming a large share of local wages.
- Consider the trade-off between price growth potential and liquidity risk; markets with high foreclosure inventories can see price volatility and thinner buyer pools.
For investors (single-family rental, buy-to-sell or REIT allocations):
- Limit portfolio concentration in counties flagged in ATTOM’s top-50 riskiest list; cap exposure by county or state.
- Stress test acquisitions using higher vacancy and longer days-on-market assumptions where unemployment exceeds 5%.
- Prefer markets with low foreclosure incidence and low shares of seriously underwater mortgages if you need defensive exposure.
For mortgage lenders and servicers:
- Apply tighter underwriting criteria in counties where foreclosure filings and unemployment are both elevated.
- Reassess loss-mitigation staffing and capital reserves for servicing portfolios concentrated in Louisiana parishes or counties with high underwater shares.
- Use ATTOM-like county rankings to inform pricing adjustments and portfolio concentration limits.
For real estate agents and brokers:
- Recalibrate marketing and pricing strategies in counties where demand is likely to shift from owner-occupiers to renters or cash buyers.
- Consider partnerships with local servicers and foreclosure specialists where inventory risk is rising.
Risks and caveats: what the data does not tell you
ATTOM’s county rankings are a strong directional indicator, but they are not a substitute for local due diligence. Important caveats include:
- County-level data can mask sub-county variation; one vulnerable census tract does not doom an entire county.
- Weather-related risk and local fiscal conditions are not fully captured by the four factors in the composite score.
- Policy responses such as targeted workforce programs or housing subsidies can change outcomes faster than data revisions appear.
We advise combining ATTOM’s rankings with local market intel, recent sales comps, employment pipeline analysis and property-level condition reports before making large capital commitments.
Final takeaways for real estate USA participants
ATTOM’s Q1 2026 report is a practical, county-level warning light system. Unemployment and foreclosure activity are the dominant drivers of risk right now, and those conditions are especially concentrated in Florida and California, with notable problem areas in Illinois and New Jersey. At the other end, Tennessee and several Midwest and New England counties show lower composite risk scores, largely because of lower unemployment and fewer seriously underwater loans.
For lenders and investors, the implication is clear: treat county-level unemployment above 5% and elevated foreclosure rates as an active risk factor for credit performance. For buyers, affordability has become the gating constraint in many coastal counties where ownership costs exceed local wages.
We still see opportunity, but it is uneven. The most straightforward action for capital allocators is to limit exposure where the data shows the greatest overlap of high unemployment, high foreclosure incidence and high negative equity—then underwrite assuming longer timelines to recovery. In practice, that means monitoring county-level unemployment and foreclosure filings on a rolling quarterly basis and adjusting exposure when a county migrates into ATTOM’s riskiest cohorts.
Frequently Asked Questions
Q: What is the single most important factor driving risk in ATTOM’s Q1 2026 report? A: ATTOM identifies unemployment and foreclosure activity as the primary drivers. Counties where unemployment exceeds 5% and distress indicators are high account for many of the riskiest rankings.
Q: Which states contain the most counties in the riskiest 50? A: Florida (12 counties) and California (9 counties) have the largest shares among the riskiest 50 counties. Illinois and New Jersey each have five.
Q: How big is the underwater-mortgage problem nationally? A: Nationwide, 3.2% of homes were seriously underwater in Q1 2026. The problem is most concentrated in Louisiana parishes, where several exceed 13%.
Q: What should small investors do if they find a property in one of the riskiest counties? A: Re-run your cash-flow and exit assumptions with higher vacancy and longer time-to-sale, lower price appreciation expectations, and consider a larger equity cushion. You may prefer markets with lower foreclosure incidence for lower downside volatility.
For lenders and investors, ATTOM’s county-level map is a practical input for risk decisions and portfolio limits. For buyers, the data is a reminder that local labor markets and foreclosure pipelines matter as much as listing prices, and in many counties affordability already exceeds what median wages can sustain.
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