Analysis of Underwater Mortgages in the U.S. – Attom Data Report

The housing market in the United States is currently experiencing a tale of two extremes. While many homeowners are enjoying the benefits of a booming housing market and accumulating significant home equity, there is a growing concern in some regions where a rising number of mortgage holders find themselves underwater on their loans.

According to a recent report by Attom Data, the South and Midwest regions of the country have the highest share of underwater mortgages. This is primarily due to a decline in home values from their peak during the pandemic housing boom, leaving some homeowners owing more on their mortgage than their home is currently worth.

In states like Louisiana and Wyoming, the share of underwater mortgages has increased, with home values dropping significantly since their peak. While these shares are still relatively small compared to the housing crisis of 2008, where 1 in 4 homes with mortgages were underwater, the situation is worth monitoring.

Experts suggest that the current strong economy and low unemployment rates provide some level of stability for underwater homeowners. However, if there is a shift in the labor market or economy, these homeowners could be at greater risk.

As the spring buying season approaches, industry experts will be closely watching to see if there are any long-term market patterns developing. In the meantime, it is essential for homeowners in these regions to stay informed and be prepared for any potential changes in the housing market.