- Home prices are falling, but that’s not always a good thing.
- In some areas, it’s causing mortgage balances to exceed the actual property value.
- Here are the 10 states with the highest percentage of underwater mortgages.
After years of rapidly skyrocketing home values, falling prices might sound like a breath of fresh air to those looking to buy a home.
However, falling home prices aren’t always a good thing. Sometimes, they’re a signal of wider economic decline in a region.
Real estate data provider ATTOM analyzed values for over 155 million properties across the US in the second quarter of 2024 and found that home prices are plummeting in certain areas.
Home price declines can lead to a surge in underwater mortgages, or when the amount owed on a home loan exceeds the home’s value. ATTOM defines a seriously underwater mortgage as a home with a loan-to-value ratio of 125% or above.
Underwater mortgages can happen for a variety of reasons. Economic downturns and natural disasters can result in falling home prices. Other reasons include rising unemployment and population decline within neighborhoods when particular industries crucial to local economies suffer, the report said.