The Most Vulnerable Housing Markets


Report reveals the most at-risk markets

It’s no secret that home values are a linchpin of reverse mortgage lending. Higher home values increase the likelihood that reverse mortgage applicants will qualify while falling home values typically result in more applications being deemed short-to-close and lower consumer interest.

In the first weeks of the COVID-19 pandemic, many began to suspect a housing crash was on the horizon. After all, the economy essentially came to a screeching halt with most office workers working remotely from home. That was the case until real estate professionals were deemed essential workers and the Federal Reserve repeatedly slashed interest rates triggering a historic runup in home prices. Mortgage professionals of all types breathed a sigh of relief and reaped the rewards of higher home values and record refinances. 

Today a nationwide housing crash is highly-doubtful yet several markets around the nation are beginning to show weaknesses that could lead to a housing downturn. 

Reverse mortgage professionals will want to see which housing metros they market in that may be at risk.

Real estate data aggregator and software provider ATTOM recently released its Special Housing Risk Report highlighting the most vulnerable housing markets. Their conclusions are drawn from fourth quarter 2023 foreclosure, affordability, and negative equity data. 

The Big Picture

California, New Jersey, and Illinois have the most at-risk markets in the country. Not surprisingly these are the states that have seen some of the largest gains in home prices. These three states account for 34 of the 50 counties most at risk of a significant decline in home values.

Housing markets near the coastline traditionally have the biggest surges of home values in a booming market and the largest risk of decline. However, 14 California inland counties far from the coast are showing signs of strain. 
Fault lines running through the foundation of the U.S. housing market continue to appear in different parts of the country, with some areas remaining more or less vulnerable than others,” said Rob Barber, CEO at ATTOM. “As always, this is not a warning sign for homeowners to run out and sell, or rush to buy, in any specific market. The housing market remains strong throughout most of the country despite some recent small downturns. Rather, this report again spotlights areas that appear more or less exposed to a market fall, should that start to happen, based on key measures.”

Key Performance Indicators


Those key performance indicators (KPIs) include the number of potential foreclosures, the number of homes underwater with mortgage balances that exceed the home’s estimated value, a disproportionate ratio of the local median household income when compared to the area’s median-priced single-family home, and a higher than average unemployment rate. 
ATTOM that 36 of the 50 most at-risk markets have five percent of traditional residential mortgages that were underwater (negative equity) in the fourth quarter of 2023. Nationwide, just over six percent of homeowners have a mortgage balance that exceeds their home’s value.
Nationally foreclosure rates remain relatively stable with just one in 1,503 homes in foreclosure. The highest concentration of foreclosures can be found in counties with a higher unemployment rate.  

Vulnerable Markets


The highest unemployment rates can be found in these central California agricultural counties
  • Tulare County, CA (10.2 percent)
  • Merced County, CA(8.5 percent) 
  • Kings County, CA (8 percent
  • Kern County (Bakersfield), CA (7.8 percent
  • Fresno County, CA (7.6 percent)
These are the 14 California counties at risk of a housing market decline/reset:
  • Butte County (Chico)
  • Sacramento County
  • El Dorado County
  • Solano County
  • Fresno County
  • Kern County (Bakersfield
  • Kings County (outside Fresno)
  • Madera County (outside Fresno)
  • Merced County (outside Fresno)
  • San Joaquin County (Stockton)
  • Stanislas County (Modesto)
  • Tulare County (outside Fresno)
  • Riverside County 
  • San Bernardino County

Additional Reading:



Is Florida Going Bust?! What HECM pros need to know


Has the Florida dream become a nightmare?


Our exclusive interview with Lorraine Geraci


Is Florida Getting Ready to Go Bust? Here’s what mortgage professionals should know.


A little less than four years ago Florida became a magnet state for Americans seeking lower taxes, more affordable housing, and a warmer climate. In the COVID and post-COVID era Florida was one of the nation’s most sought-after places to move. Fewer lock-down restrictions, a lower cost of living, and an improved quality of life for former city dwellers. In fact, Florida held 10 of U-Haul’s Top 25 Growth Cities of 2021. Florida’s population grew by over 200,000 residents from July 2020 to July 2021 and even more in 2022.


Today, Floridians are facing a host of challenges which in part include skyrocketing homeowners insurance premiums, surging property taxes, and record rent hikes. A dark cloud has begun to form over the Sunshine State. Will housing prices crash? How are retirees in the state being impacted? Will the homeowners’ insurance mess ever get sorted out?


For answers to these questions and to learn more about what’s happening we thought we’d get an update from the front lines. Please welcome Lorraine Geraci, a Florida resident reverse mortgage professional and corporate trainer. Thank you so much for joining us, Lorraine.

Leave your questions for Lorraine in the comments section below.