Underwater Mortgages Surge Nationwide
The housing market is cracking as underwater mortgages surge in states like Louisiana and condo prices crash by double digits in major cities.
This downturn is spreading to single-family homes while hitting investors hard, with home flipping profits dropping $5,000 per deal.
Even with slightly lower mortgage rates, buyers are staying away, creating a perfect storm where construction starts hit five-year lows and everyone from sellers to builders feels the squeeze.
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Percent of Properties Seriously Underwater by State for the First Quarter 2025
In Louisiana, 1 in every 10 mortgages are seriously underwater. The counties with the highest percent of mortgages seriously underwater are Vernon, Saint Martin, Iberville, and Webster.
The Condo Bust Is Here: Prices Dropped Already 10% to 23% in 20 Bigger Cities
Condos are often the first and biggest movers in local housing markets – on the way up, and on the way down. In some densely populated cities, such as San Francisco, condos make up a bigger part of the housing market than single-family homes.
The 10 Big Cities with the Biggest Price Declines of Single-Family Homes
Some big cities have been showing price declines for some time, and in 10 of them, the price declines have turned more serious, seasonally adjusted, after the gigantic price explosion over the prior few years.
Home Flipping Profits Drop in First Quarter
Gross profits on a typical flipped home were down to $65,000 from $70,000 in the fourth quarter of 2024. The typical investor paid $260,000 for a home they flipped in the first quarter of 2025 and sold the property for $325,000.
May Housing Starts Fall to Five-Year Low
Home buyer traffic has slowed amidst economic uncertainty and persistently high mortgage rates, and more builders are cutting home prices to entice would-be buyers.
Mortgage Demand Drops, Even as Rates Fall to the Lowest Since April
Applications for a mortgage to purchase a home fell 3% last week compared with the previous week. This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, decreased to 6.84% from 6.93%
