The District of Columbia, Maryland, Louisiana, Georgia, and Oklahoma saw the sharpest increases. Louisiana led the nation with 11.2% of homes seriously underwater, while New England states such as Vermont (0.6%) and Rhode Island (1%) maintained the lowest rates.
Regional disparities were also pronounced at the metro and county level. San Jose, CA, and Buffalo, NY, topped the list for equity-rich metros, while Baton Rouge, LA, and New Orleans, LA, had the lowest.
In the Midwest, Michigan counties dominated the top equity-rich rankings, while 21 of the 30 counties with the lowest equity-rich rates were in Louisiana.
The latest data points to a housing market in transition. While home prices have continued to climb, the pace of equity accumulation has slowed, and pockets of risk are emerging in states with high underwater rates.
This comes as mortgage rates remain elevated and affordability challenges persist, prompting some analysts to warn of potential stress among recent buyers with minimal down payments.