Rising foreclosures and “particularly high rates of unemployment” characterized county-level housing markets most vulnerable to economic shocks in the first quarter.

More than 60% of the 50 most vulnerable U.S. counties were concentrated in just four states, according to real estate analytics firm Attom, updating its Housing Risk Report for the first quarter on Thursday.

Florida claimed 12 of those riskiest markets, followed by California, which contained nine. Illinois and New Jersey each accounted for five, stated the Attom report, which evaluates counties for being “more or less vulnerable to declines” based on home affordability, home equity levels, and foreclosure and unemployment rates.

Topping the list for riskiest counties as it did in the fourth quarter was Charlotte County, Fla., just north of the city of Cape Coral. Butte County, Calif., the epicenter of the devastating 2018 Camp Fire, moved into second from third in the fourth quarter, followed by Charles County, Md., which had been second but dropped down to third.

Rob Barber, CEO of Attom, commented in the report that despite softening home price trends, housing affordability remains challenging “in much of the country.”

“The greatest risk remains in counties where unemployment rates are above 5% and homes are being foreclosed at greater rates,” said Barber. One out of every 1,211 homes across the U.S. was in the process of foreclosure during the first three months of 2026.

Softening and declining home prices in some markets across the U.S. have contributed to gradual increase in the share of homes considered seriously underwater, or properties secured by loan balances exceeding the property’s estimated market value by at least 25%.

Rising from 2.8% in the third quarter of last year to 3% in the fourth quarter, Attom says that 3.2% of home nationwide were seriously underwater in the first quarter of 2026.

Normalization in national foreclosure rates has also been an overarching theme in the housing market in late 2025 and early 2026, as pandemic-era moratoriums and emergency loss mitigation programs that effectively halted foreclosure activity came to an end.

Approximately 3,000 additional mortgage loans slipped into active foreclosure in April, pushing total volumes to 276,000, or roughly 32% higher than year-ago levels, according to ICE Mortgage Technology. April marked the second consecutive month that foreclosure inventory has exceeded pre-pandemic norms.

According to Attom’s analysis — which covered 580 of the more than 3,000 U.S. counties and county-equivalents — found that Liberty County, Texas, posted the highest foreclosure rate in the first quarter, with one in every 55 homes in the process of foreclosure.

Baltimore City, Md., followed, with one in every 294 homes. Dorchester County, S.C., rounded out the top three, with one in every 352 homes being in the process of foreclosure.

From an affordability standpoint, California counties claimed four of the five counties where monthly payments on median-priced homes consumed the largest share of area median wages. The top spot went to Kings County, N.Y., however, where that ratio was 108.6%.