1.5% of US Homeowner Mortgages Have Negative Equity
Nationally, 1.5% of outstanding homeowner mortgages had negative equity at the end of May 2026, up from 1% in April 2025. This means the amount owed on the mortgage exceeds the home's current market value.
Approximately 1.5% of all outstanding homeowner mortgages in the U.S. were in negative equity, or 'underwater,' by the end of May 2026. This figure represents a slight increase from 1% recorded in April 2025, according to data from ICE Mortgage Technology.
Despite price corrections in some overheated markets, especially in the West, Southwest, and Southeast, national aggregated existing home prices remain near all-time highs. Factors contributing to the low overall negative equity include the amortization of low mortgage rates secured by many homeowners during the pandemic boom. As of the first quarter of 2026, nearly 50% of outstanding mortgage holders still had rates below 4%, aiding faster equity build-up.
The metro area with the highest share of underwater mortgages is Cape Coral-Fort Myers, Florida, at 11.1%. Other areas with elevated negative equity include Lakeland, Florida (7.8%), and San Antonio, Texas (7.7%). Conversely, markets like Bridgeport, Connecticut, and San Jose, California, reported the lowest shares at just 0.1%.
While negative equity is a concern in specific markets, the national rate remains far below the levels seen during the 2009 financial crisis, when rates in some states exceeded 40%. The current instances are largely concentrated among loans originated in 2022-2025, particularly those with smaller down payments.