Underwater Mortgages Are On The Rise

New data from ATTOM's Q2 2026 Home Equity & Underwater Report:
3.2% of mortgaged homes are now "seriously underwater", up from 2.7% a year ago
Minnesota saw the sharpest spike in the country, jumping from 2.6% to 12.1% underwater in a single year.
The trend worsened in 33 states and Washington, D.C.

Only 41.1% of mortgaged U.S. homes are now "equity-rich", down from 43.3% last quarter and 47.4% a year ago. That's four straight quarterly declines.

For most of the last five years, the story was record home equity and homeowners sitting on windfalls. That story is quietly reversing.
Rates cooled prices. Prices cooled equity. And a growing number of homeowners are watching a cushion they thought was permanent shrink every quarter.
Worth watching where this goes from here.