States With the Most Underwater Mortgages

With home prices slipping in many parts of the country, homeowners are finding themselves owing far more than their properties are worth. A recent report from property data provider ATTOM shows that 2.7% of outstanding mortgages were seriously underwater in Q-2 2025, meaning the combined estimated loan balances were at least 25% higher than the home’s estimated market value. While only accounting for a small fraction of the housing market, this figure is up from 2.4% the year prior.

Nationwide, the market remains relatively stable, but some states are seeing much higher shares of underwater mortgages. Louisiana led the nation, with its share of seriously underwater mortgages rising from 10.5% in Q-2 2024 to 11.9% in Q-2 2025. Kentucky followed, climbing from 6.3% to 7.% over the same time period. Mississippi had the third highest share, though its rate slipped slightly from 6.8% to 6.5% year-over-year.

Louisiana remains the state with the highest percentage of seriously underwater mortgages, though the rate rose from 10.5% to 11.9% from Q2 2024 to Q2 2025. Louisiana holds the #1 spot for seriously underwater mortgage rates. That equals about one in every 8 home loans across the state. Counties topping the list for highest underwater rates include Vernon (27.7%), De Soto (22.8%), and Acadia (22.5%).