Property data curator ATTOM released a Special Housing Risk Report spotlighting county-level housing markets that are more or less vulnerable to declines, based on home affordability, underwater mortgages and other measures in the first quarter of 2024.

The report showed California, New Jersey and Illinois once again had the highest concentrations of the most-at-risk markets in the country, with some of the biggest clusters in the New York City and Chicago areas, as well as inland California. Less vulnerable markets remained spread mainly throughout the South and Midwest.

First-quarter patterns – derived from gaps in home affordability, underwater mortgages, foreclosures and unemployment – revealed California, New Jersey and Illinois had 34 of the 50 counties around the U.S. considered most exposed to potential drop-offs. As with earlier periods over the past few years, those concentrations dominated the list of metropolitan areas more at risk of downturns.

The 50 counties on the list included six in and around Chicago, five in the New York City metropolitan area and 14 in areas of California mostly away from the Pacific coast. The rest were scattered around other parts of the country.

At the other end of the risk spectrum, 22 of the 50 markets considered least likely to decline fell in Virginia, Wisconsin and Tennessee. They included four each in the Washington, D.C., and Richmond, Va., metro areas.

“The patterns of varying market vulnerability that we’ve been seeing over the past few years are pretty much continuing in place, with some of the same areas falling out at opposite ends of the trend line,” Rob Barber, CEO at ATTOM, said in a release. “Once again, this is not to suggest that any one market is facing imminent decline. It’s more a measure of vulnerability gaps. But with the housing market slowing down over the past year, some metro areas appear notably better positioned than others to withstand a scenario of the market topping out and heading downward.”

Counties were considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes and local unemployment rates. The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Unemployment rates came from federal government data.

Rankings were based on a combination of those four categories in 590 counties with sufficient data to analyze. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the four ranks.

Widely varying levels of risk continued to show up around throughout the country in the first quarter following a year when various market metrics – including home prices, profits, equity and affordability – tracked lower or cooled off across much of the nation.