I've had several conversations recently with people convinced we're headed for a crash. Prices have cooled in some markets, a few scary headlines are floating around, and it's a fair thing to wonder about if you're thinking about buying or selling. So instead of giving you my gut feeling, I would show you the actual numbers.
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The Real Number
As of the end of May 2026, only 1.5% of outstanding U.S. homeowner mortgages have negative equity, meaning the homeowner owes more than the home is worth. That's up slightly from 1.0% on a national level from a year ago. Now compare that to September 2009, when 23% of mortgages nationally were underwater. In Nevada it was 68%, Arizona was 48%, and Florida was 45%, all of which were hit the hardest from the 2008 crash. Today’s numbers aren’t anywhere close to those numbers.
Why Prices Haven't Collapsed
Even in markets that have corrected, like Austin (down 27.3% from its peak) or Cape Coral (down 18.9%), most owners still aren't underwater. Three reasons why:
Nationally, prices are still near record highs. Local corrections haven't dragged down the national picture.
Locked-in low rates built equity faster. Nearly half of all mortgage holders (49.9%) still have a rate under 4%. Lower rates mean more of every payment goes toward principal, not interest, so homeowners have been paying down their balances faster than historically.
Few people bought at the exact top. Even in the hardest-hit markets, only a small slice of current owners purchased at 2022 peak.
Where the Risk Actually Sits
The risk isn't evenly spread. It's concentrated in a handful of Sun Belt metros that saw the steepest run-ups and the steepest corrections.
Highest share of underwater mortgages: Cape Coral-Fort Myers, FL (11.1%), Lakeland, FL (7.8%), San Antonio, TX (7.7%), Austin, TX (6.6%), North Port, FL (5.3%)
Lowest share: Bridgeport, CT and San Jose, CA (0.1% each), Boston, MA and Los Angeles, CA (0.2% each), Hartford, CT (0.2%)
Closer to home, Provo-Orem sits at 2.1% as of May 2026, up from 1.3% a year earlier. That's ticked up, and it's worth watching, but it's still a fraction of what's showing up in Austin (6.6%) or Cape Coral (11.1%), let alone anything close to 2009 levels.
If You're Selling
This is genuinely good news. A thin slice of negative equity nationally means most sellers have real flexibility. You're not forced to sell at a loss, and you're not stuck. That matters most for pricing strategy. If a listing has been sitting, it's rarely because the seller is underwater. It's almost always about price, condition, or marketing, all things we can actually fix.
If You're Buying
Fewer sellers with negative equity means fewer distressed or forced sales hitting the market, so don't expect a wave of desperate sellers or fire-sale pricing. What you're seeing in Utah right now (more normal negotiating room, seller concessions, fewer bidding wars) is a market correcting gently, not one that's cracking.
Here to serve,
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P.S. Curious what your specific equity position looks like? Reply with your address and I'll put together a free, no-obligation market analysis for your home.
