Is the housing market at risk as more homeowners slip underwater?

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A modest rise in negative equity is emerging across parts of the U.S. housing market, but the overall picture remains far more stable than anything resembling the Global Financial Crisis.

Having negative equity—commonly known as being “underwater”—means a homeowner owes more on their mortgage than the home’s current market value. According to ICE Mortgage Technology, just 1.0% of U.S. mortgages were underwater in April 2025. By October 2025, that share rose to 1.6%. That’s an uptick, but still extremely low by historical standards. For comparison, during the worst of the foreclosure crisis in September 2009, 23.0% of homeowner mortgages were underwater, per CoreLogic/First