These 15 housing markets have the most borrowers underwater

"Since the Pandemic Housing Boom fizzled out in the summer of 2022, some overheated parts of the country-particularly in the West, Southwest, and Southeast-have experienced home price declines from their peak. While many of these markets have seen only modest drops, a few metro areas, such as Cape Coral and Austin, have undergone what I'd consider "material" home price corrections, falling -19.1% and -27.8%, respectively, from their peaks."

"2.1% -→ The share of outstanding U.S. homeowner mortgages with negative equity* (i.e. underwater) at the end of December 2025, according to data from ICE Mortgage Technology provided to ResiClub this week. Back in December 2024, that figure was 1.3%."

"23.0% -→ The share of outstanding homeowner mortgages with negative equity (i.e. underwater) at the end of September 2009, according to Cotality/FirstAmerica."

Following the pandemic housing boom's collapse in summer 2022, certain U.S. markets experienced significant home price declines from their peaks. Western, Southwestern, and Southeastern regions were particularly affected, with some metro areas like Cape Coral and Austin experiencing material corrections of -19.1% and -27.8% respectively. Despite these regional price drops, the national share of underwater mortgages remains relatively modest. As of December 2025, only 2.1% of outstanding U.S. homeowner mortgages have negative equity, up from 1.3% in December 2024. This contrasts sharply with the 2009 financial crisis when 23% of mortgages were underwater, indicating that despite localized market challenges, most homeowners maintain positive equity positions.

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