The American Financial Services Association (AFSA) announced in a newsletter that nearly 900,000 U.S. homeowners are underwater on their mortgages, indicating renewed pressure on household finances and the housing market's stability.
A recent analysis based on Intercontinental Exchange mortgage data reports that nearly 900,000 U.S. homeowners now owe more than their homes are worth. This situation represents about 1.6% of all mortgage holders and marks the highest share in three years. The report indicates that negative equity is most prevalent among households that purchased homes in recent years with small down payments, leaving many first-time buyers particularly vulnerable to price declines.
According to property analytics firm ATTOM’s Q2 2025 Home Equity & Underwater Report, the share of U.S. homes classified as "equity-rich" has decreased to 47.4%, down from 48.3% a year earlier. Meanwhile, the portion of properties considered seriously underwater—where owners owe at least 25% more than the home’s estimated market value—has increased to 2.8%. This rise occurred year over year in 46 states despite national median prices reaching approximately $370,000.
Existing-home sales in the United States fell to 4.06 million in 2024, marking the lowest annual level since 1995, according to data from the National Association of Realtors as reported by the Associated Press. The decline reflects elevated mortgage rates near 7%, limited inventory, and record-high prices, with the national median sale price reaching about $407,500. These factors have priced out many potential buyers and slowed transaction volumes across the market.
The American Financial Services Association is described as the primary trade association for the U.S. consumer credit industry. AFSA represents hundreds of companies providing mortgages, vehicle financing, traditional installment loans, credit cards, and other forms of consumer credit. It focuses on protecting access to credit and consumer choice while offering members policy advocacy, compliance resources, and market intelligence at both federal and state levels.