The percentage of seriously underwater U.S. residential mortgages rose in Q1 to 2.8% of all loans, a 0.4% increase from Q4, according to ATTOM, defining 'seriously underwater' as loan balances exceeding market value by at least 25%. Despite this uptick, the overall rate has remained relatively flat since 2020. Louisiana reported the highest concentration at 10.5%, highlighting regional disparities and potential pockets of housing market stress.
The share of U.S. residential properties classified as "seriously underwater" increased to 2.8% in the first quarter, a 0.4 percentage point rise from the previous quarter. This classification, defined by ATTOM as a loan balance exceeding the property's market value by 25% or more, signals a marginal increase in homeowner financial stress. However, this recent uptick should be viewed in the context of the overall rate remaining "relatively flat since 2020," suggesting the trend may not yet indicate a systemic deterioration. The most critical insight from the data is the significant regional divergence in housing market health. States like Louisiana exhibit a high concentration of distress, with 10.5% of mortgages seriously underwater, starkly contrasting with states like Vermont, where the rate is only 0.7%. This disparity indicates that while the national average remains low, specific geographic pockets face considerable housing market risk and potential for increased defaults.
AI-powered research, real-time alerts, and portfolio analytics for institutional investors.
Request a DemoOverall Sentiment
mildly negative
Sentiment Score
-0.15
