NEW YORK — The share of U.S. homeowners with mortgages that are “underwater” has increased modestly over the past year but remains historically low despite home price corrections in several formerly booming housing markets, according to an analysis by ResiClub using data from ICE Mortgage Technology.
Negative equity affected 1.5% of outstanding U.S. homeowner mortgages at the end of May 2026, up from 1% in April 2025, according to ICE data provided to ResiClub.
The figure remains far below the levels reached during the housing market collapse following the Great Recession. At the end of September 2009, approximately 23% of U.S. homeowner mortgages were underwater, according to historical data from Cotality/First American cited by ResiClub.
Markets Seeing Declines
The increase comes after some markets that experienced sharp gains during the pandemic housing boom have undergone significant price corrections since the market peaked in 2022. ResiClub noted that home prices have fallen approximately 27.3% from their peak in the Austin, Texas, metro area and 18.9% in the Cape Coral-Fort Myers, Florida, market.
ResiClub said several factors have helped keep negative equity from becoming a broader national concern despite those localized declines.
Among them:
- National existing-home prices remain near record highs despite declines in some regional markets.
- Nearly half—49.9%—of outstanding mortgage holders had interest rates below 4% as of the first quarter of 2026, allowing borrowers to pay down principal more quickly than borrowers with higher-rate loans.
- Only a relatively small share of homeowners purchased properties at the market peak in spring 2022, meaning many owners still have substantial equity accumulated before prices began falling.
Markets With Highest Rates
While the national rate remains low, several Sun Belt metro areas have notably higher shares of underwater borrowers.
According to ICE Mortgage Technology data cited by ResiClub, the 10 major metro areas with the highest percentage of underwater homeowner mortgages were:
- Cape Coral-Fort Myers, Florida: 11.1%
- Lakeland, Florida: 7.8%
- San Antonio: 7.7%
- Austin, Texas: 6.6%
- North Port, Florida: 5.3%
- Jacksonville, Florida: 4.1%
- Tampa, Florida: 4.0%
- Baton Rouge, Louisiana: 3.5%
- Dallas: 3.5%
- Deltona, Florida: 3.0%
Lowest Shares of Underwater Borrowers
By comparison, the metros with the lowest shares of underwater borrowers were:
- Bridgeport, Connecticut: 0.1%
- San Jose, California: 0.1%
- Boston: 0.2%
- Los Angeles: 0.2%
- Hartford, Connecticut: 0.2%
- Madison, Wisconsin: 0.3%
- Grand Rapids, Michigan: 0.3%
- Oxnard, California: 0.3%
- New Haven, Connecticut: 0.3%
- New York-Newark: 0.3%
Even in the hardest-hit markets, today’s negative equity levels remain well below those recorded during the financial crisis. ResiClub noted that in September 2009, approximately 68% of mortgage borrowers in Nevada, 48% in Arizona and 45% in Florida were underwater.
Most Purchases Between 2022-2025
The analysis found that most of today’s negative equity is concentrated among homeowners who purchased during or after the market peak between 2022 and 2025. Borrowers who made smaller down payments, including many using FHA and VA loans, are more likely to have slipped into negative equity because they began with thinner equity cushions.
Looking ahead, ResiClub said additional modest home price declines in parts of the Southwest, Southeast and West would likely increase the number of recent borrowers with negative equity in those regions. However, absent a much steeper nationwide decline in home values, the firm said current conditions remain far removed from the widespread negative equity experienced during the housing crash of 2009 and 2010.
