Where Mortgage Stress Is Showing First
Mortgage distress still looks tame next to 2008, but the weak spots are getting easier to name.
Louisiana and Mississippi now stand out as insurance shocks and consumer credit stress push more borrowers into delinquency.
At the same time, the homeowner equity cushion is getting thinner.
Equity-rich homes fell to their lowest level since late 2021, while seriously underwater homes ticked higher across most states.
Louisiana, Kentucky, and Mississippi led that underwater move, putting the same Gulf-adjacent stress belt back in focus.
The signal is simple: broad equity remains intact, but the cleanest stress is showing up where delinquencies, insurance pressure, and thinner collateral already overlap.
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Which housing markets have the most—and least—mortgage distress right now?
Mortgage distress is still low by 2008 standards, but the pressure is showing up in specific places. Louisiana and Mississippi now stand out, with insurance shocks and consumer credit stress pushing more borrowers into delinquency.
Home Equity Rates Continue to Decline in First Quarter
Homeowner equity is still strong, but the cushion is getting thinner. Equity-rich homes fell to the lowest level since late 2021, while seriously underwater homes ticked higher across most states, led by Louisiana, Kentucky, and Mississippi.
Housing Market’s Crucial “Spring Selling Season” Is in Tatters
Spring selling season was supposed to unlock the housing market, but demand stayed frozen. Purchase mortgage applications are still 34% below 2019 levels as 6.5% rates, high prices, and lock-in keep buyers and sellers stuck.
April home sales disappoint as higher mortgage rates weigh on buyers
April sales barely moved, even with analysts expecting a spring bounce. Existing home sales rose just 0.2%, inventory stayed tight, and the median price hit a record April high as buyers faced another jump in mortgage rates.
Housing Bubble & Bust #1 and #2 as Seen through Employment at Mortgage Lenders and Mortgage Brokers
Mortgage lenders are cutting staff because the demand collapse has already hit. Nonbank lender jobs are down 40% from 2021, broker jobs are down 38%, and combined mortgage employment has fallen to its lowest level since May 2012.
Higher Rates Hit Mortgage Apps, But Only Modestly
Mortgage demand slipped as rates moved higher, but purchase activity is still holding above last year. Applications fell 4.4%, refis lost momentum, and record purchase loan sizes suggest higher-priced buyers are carrying more of the market.
