Florida’s housing market is showing increasing signs of vulnerability, with several areas identified as among the nation’s riskiest for potential home price drops. Despite a strong luxury market in South Florida during 2025, underlying economic factors are creating a precarious situation for homeowners across the state.
Key Takeaways
- Twelve Florida counties are among the 50 highest-risk housing markets nationwide.
- Charlotte County, Florida, is identified as the riskiest housing market in the U.S.
- High unemployment rates and increasing foreclosures are key indicators of risk.
- Affordability remains a significant challenge across many U.S. housing markets.
Florida’s Vulnerable Housing Landscape
According to a first-quarter 2026 housing risk report from ATTOM, Florida has the highest concentration of at-risk housing markets, with 12 counties appearing in the top 50. This places the state ahead of California, which has nine such counties. Charlotte County, encompassing Punta Gorda, was specifically named the nation’s riskiest housing market. The report’s risk assessment is based on a combination of factors, including affordability relative to local incomes, the prevalence of seriously underwater mortgages, foreclosure rates, and county unemployment levels.
Factors Driving Housing Market Risk
ATTOM’s analysis highlights several critical factors contributing to housing market instability. Nationally, the average homebuyer dedicates 30% of their income to homeownership costs. However, in some counties, this figure escalates dramatically, with housing expenses consuming upwards of 88% of a typical resident’s annual wages. California counties dominate the list of least affordable markets, with Kings County, New York, topping the national list where home expenses consume 108.6% of the typical resident’s income.
Underwater Mortgages and Foreclosure Trends
Nationwide, 3.2% of homes are considered seriously underwater, meaning the loan balance exceeds the property’s market value by at least 25%. Louisiana shows a particularly high rate of underwater mortgages, with eight of the top ten counties in this category located in the state. Foreclosure activity is also a concern, with one in every 1,211 homes nationwide in the foreclosure process in the first quarter of 2026. Liberty County, Texas, leads this metric with one in 55 homes in foreclosure.
Unemployment Rates and Safer Markets
High unemployment rates are a significant driver of housing risk. While the national unemployment rate stood at 4.4% in February, several counties face much higher jobless rates. Four of the five counties with the highest unemployment rates are in California, including Imperial County at 17.6%. In contrast, Chittenden County, Vermont, is identified as the nation’s safest housing market, benefiting from low unemployment and foreclosure rates, alongside a low percentage of underwater mortgages. Other safe markets include Rutherford County, TN; Arlington County, VA; Tippecanoe County, IN; and Cumberland County, ME.
Sources
- Florida Remains the Riskiest Housing Market for Price Declines, Realtor.com.
- Florida, California counties top list of high-risk housing markets, HousingWire.