Nearly 1 million homeowners across the U.S. find themselves “underwater” on their mortgages.
This unhappy condition — also known as having “negative equity” or being “upside down” on your mortgage — results when you owe more on your mortgage than your home is worth.
A decline in your home’s value or an increase in your home-loan debt can quickly put you underwater.
The good news is that the percentage of homeowners who are underwater on their mortgages declined sharply in the second quarter of 2024. Nationwide, 1.7% of all mortgaged properties are underwater, according to CoreLogic’s latest quarterly Homeowner Equity Insights report, a number that is down 4.2% compared with the first quarter of 2024.
Year over year, negative equity is down 15%.
However, negative equity remains a problem in more than a few places. Here are the states with the highest percentage of homeowners who are underwater on their mortgages.
1. Louisiana
This state’s share of negative equity: 5.6% of mortgaged residential properties as of the second quarter of 2024
More than 5% of Louisiana’s homeowners may be underwater, but the news isn’t all bad in the Pelican State. Louisiana communities dominate the list of the “10 Places Where Property Tax Bills Are Under $250 a Year.”
2. Iowa
This state’s share of negative equity: 4.6% of mortgaged residential properties as of the second quarter of 2024
Even though many Iowa homeowners are struggling to stay above water on their mortgages, this is still an affordable place to live. The Hawkeye State is among the places we highlight in “Retired Life Is As Cheap As It Gets in These 10 States.”
3. Mississippi
This state’s share of negative equity: 3.9% of mortgaged residential properties as of the second quarter of 2024
Adding insult to injury, Mississippi homeowners who are underwater also have to deal with the fact that the state is among the “19 States That Have Costly Hurricane Deductibles (and Even D.C.).”
Other states with high negative equity
Here are the rest of the states with a higher percentage of homes currently underwater:
- Oklahoma (3.9%)
- North Dakota (3.4%)
- Arkansas (3.1%)
- Kentucky (3.1%)
- Nebraska (2.9%)
- Wisconsin (2.7%)
- New York (2.6%)
- Missouri (2.4%)
- Tennessee (2.4%)
- Alabama (2.3%)
- Illinois (2.3%)
- Wyoming (2.3%)
- Idaho (2.2%)
- Minnesota (2.1%)
- New Mexico (2.1%)
- Delaware (2%)
At the other extreme, California (0.7%), Nevada (0.7%), Hawaii (0.8%) and Arizona (0.9%) have the smallest shares of underwater homes.
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