diff --git a/internal/decoder/validations/unreferenced_origin.go b/internal/decoder/validations/unreferenced_origin.go
index 046acc9a..1a99c1b1 100644
--- a/internal/decoder/validations/unreferenced_origin.go
+++ b/internal/decoder/validations/unreferenced_origin.go
@@ -6,6 +6,7 @@ package validations
 import (
 	"context"
 	"fmt"
+	"slices"
 
 	"github.com/hashicorp/hcl-lang/decoder"
 	"github.com/hashicorp/hcl-lang/lang"
@@ -44,11 +45,12 @@ func UnreferencedOrigins(ctx context.Context, pathCtx *decoder.PathContext) lang
 			continue
 		}
 
-		// we only initially validate variables
+		// we only initially validate variables & local values
 		// resources and data sources can have unknown schema
 		// and will be researched at a later point
-		firstStep := address[0]
-		if firstStep.String() != "var" {
+		supported := []string{"var", "local"}
+		firstStep := address[0].String()
+		if !slices.Contains(supported, firstStep) {
 			continue
 		}
 
diff --git a/internal/decoder/validations/unreferenced_origin_test.go b/internal/decoder/validations/unreferenced_origin_test.go
index fba76ecf..7c39cd6b 100644
--- a/internal/decoder/validations/unreferenced_origin_test.go
+++ b/internal/decoder/validations/unreferenced_origin_test.go
@@ -50,6 +50,35 @@ func TestUnreferencedOrigins(t *testing.T) {
 				},
 			},
 		},
+		{
+			name: "undeclared local value",
+			origins: reference.Origins{
+				reference.LocalOrigin{
+					Range: hcl.Range{
+						Filename: "test.tf",
+						Start:    hcl.Pos{},
+						End:      hcl.Pos{},
+					},
+					Addr: lang.Address{
+						lang.RootStep{Name: "local"},
+						lang.AttrStep{Name: "foo"},
+					},
+				},
+			},
+			want: lang.DiagnosticsMap{
+				"test.tf": hcl.Diagnostics{
+					&hcl.Diagnostic{
+						Severity: hcl.DiagError,
+						Summary:  "No declaration found for \"local.foo\"",
+						Subject: &hcl.Range{
+							Filename: "test.tf",
+							Start:    hcl.Pos{},
+							End:      hcl.Pos{},
+						},
+					},
+				},
+			},
+		},
 		{
 			name: "unsupported variable of complex type",
 			origins: reference.Origins{