Cities in California, Illinois, Florida and New York are the most at risk of facing a housing market downturn this year, according to a new report by real estate analytics website ATTOM.
In its latest Special Housing Risk Report, which considers factors including gaps in affordability, underwater mortgages, foreclosures and unemployment, ATTOM found that two-thirds of the 50 U.S. counties most exposed to potential fallbacks were in these four states.
Why It Matters
The dynamics that we are now seeing unfolding in the U.S. housing markets are largely the result of the boom that the country experienced during the pandemic, according to ATTOM. Risk disparities across the nation, it said, could either cool off these markets or spur their boom “even higher.”
Rising home prices over the past five years have pushed many aspiring buyers to the sidelines as the cost of housing far outpaced wage gains. At the same time, high mortgage rates—which are expected to continue hovering around the 7 percent mark in 2025 and 2026—have brought housing costs up further and continued to erode buyers’ purchasing power…