One Company Says Underwater Mortgages Are Almost Gone. Six of the Ten Worst Metros in America Are in Florida.
Last week a major housing data firm published a report saying negative equity has become, in their words, a near-obsolete concern. Nationally, they have a case. Their number says 1.9% of mortgaged homes in this country are worth less than the loan against them, down from 26% at the bottom of the last crash.
Then you look at the metro list from a different dataset, and six of the ten most underwater metros in America are Florida metros. Jacksonville is number six.
Both of those things are being reported at the same time about the same country. Here’s how they fit together, and what it means if you bought a Florida house in the last four years.
What the National Number Says
Cotality, the firm formerly known as CoreLogic, released its Homeowner Equity Insights report on July 23 with first-quarter 2026 data. Homeowners with mortgages hold $17.9 trillion in equity nationally. Across 56.7 million properties, the average borrower has about $310,500 in equity. Underwater properties dropped 9% from a year ago, roughly 106,000 homes. About 1.09 million homes are underwater, or 1.9% of mortgaged properties.
That’s a real number from a real dataset, and it’s genuinely good news for most of the country. Their chief economist, Selma Hepp, even describes all that equity as golden handcuffs, meaning people are sitting on so much of it that they won’t move, which slows the market down.
One thing worth knowing before you go further: these are proprietary estimates from private companies, not government data. Each firm runs its own model to guess what a house is worth and compares that guess to the loan balance. That’s not a knock on them. It’s just what the numbers are.
A Second Dataset Points the Other Direction
ICE Mortgage Technology pulled its own read from loan servicing data and gave it to Lance Lambert at ResiClub, published in Fast Company on July 4. Their figure: 1.5% of outstanding US mortgages were underwater at the end of May 2026, up from 1.0% in April 2025.
That’s about a 50% jump in thirteen months. Cotality says the count fell 9% over roughly the same stretch.
I’m not calling either one wrong. They measure different things. Cotality counts mortgaged properties against a current estimated value. ICE counts outstanding mortgages out of servicing records. Different periods too, first quarter versus end of May. Two careful firms can run different models and land in different places.
But if you live in Florida and you read “near-obsolete,” you should also see the second number.
The Metro Table Is Where the Average Falls Apart
ICE broke its data out across the 100 largest metros. Here are the ten with the highest share of mortgages currently underwater, as of that July 4 publication.
Cape Coral-Fort Myers, Florida: 11.1%
Lakeland, Florida: 7.8%
San Antonio, Texas: 7.7%
Austin, Texas: 6.6%
North Port, Florida: 5.3%
Jacksonville, Florida: 4.1%
Tampa, Florida: 4.0%
Baton Rouge, Louisiana: 3.5%
Dallas, Texas: 3.5%
Deltona, Florida: 3.0%
Six Florida metros in the top ten. Cape Coral is at 11.1%, which is more than five times the national figure Cotality published.
The bottom of that same list is the mirror image. Bridgeport, Connecticut and San Jose, California sit at 0.1%. Boston and Los Angeles at 0.2%.
So when somebody quotes you 1.9% or 1.5%, ask which house they’re talking about. A national average blends Cape Coral and San Jose into one number, and that number describes neither place.
Two more details from Lambert’s work matter more than the headline.
It’s concentrated by when you bought. The damage sits almost entirely with people who bought in 2022, 2023, 2024 and 2025. Cape Coral prices are down 18.9% from peak in that dataset. Austin is down 27.3%.
It’s concentrated by down payment. Lambert points at FHA and VA borrowers who put down as little as 3.5%. When you start with that little cushion, a modest price drop puts you underneath.
The Footnote That Matters Most
Buried in Lambert’s own asterisk is the part that describes most of the people who call me.
Some homeowners are not technically underwater. They have a little equity on paper. But once you subtract what it actually costs to sell a house, they still can’t close without bringing money to the table.
Those people don’t show up in the 1.5%. They don’t show up in the 1.9% either. On paper they’re fine. At the closing table they’re short.
If you bought in the last four years with a small down payment, that’s the math to run before you assume you’re okay. What’s the house worth today, what’s the payoff on the loan, and what does it cost to sell. That third number is the one people leave out.
What That Looks Like on One Street
Yesterday afternoon a housing analyst with a big following posted a specific Gulf Coast listing in Manatee County. New construction, built in 2023, bought for $568,000. It’s on the market now at $425,000. That’s $143,000 below what the buyer paid three years ago.
He estimates the mortgage at roughly $470,000, which would put the owner about $45,000 underwater before a single closing cost. His post says the home is being sold as a short sale.
I’ll be straight about what I know here. The listing and the price history are verifiable. The mortgage balance is his estimate, not a public record, and the short-sale designation came off the listing page rather than something I pulled myself. Treat both as reported.
I’m not naming the address or the owner, and I’d ask you not to go looking. That’s somebody’s house and somebody’s hard year. The situation is the useful part, not the street.
Because that’s what Cotality’s statistics and ICE’s metro table look like when they land on one family. A 2023 buyer, thin on down payment, in a Gulf Coast county, now well underwater.
Three Things Nobody in That Comment Section Mentioned
The post got a quarter million views. The replies were mostly people arguing about whether the market is crashing. Nobody said any of this to the seller.
Florida is a recourse state. After a short sale, unless the lender puts a waiver in writing, they can come after the difference for up to five years. The waiver is not automatic. It’s a negotiated term, and it’s the single most important sentence in the approval letter.
The tax break expired. The Qualified Principal Residence Indebtedness exclusion, which kept forgiven mortgage debt from counting as taxable income, ended January 1, 2026. Forgiven short-sale debt is taxable again unless something else applies, like insolvency or a written agreement dated before this year. That’s a CPA conversation, not a real estate agent conversation, and anyone who tells you otherwise is guessing.
A short sale and a foreclosure are not the same outcome. Realtor.com data reported by National Mortgage News on July 16 shows short sales recovering about 9% more of a home’s estimated value than foreclosures do. That difference goes somewhere. Sometimes it’s the deficiency you don’t owe.
And one clarification that matters, because these three words get used interchangeably and they shouldn’t be. Underwater means you owe more than the house is worth. That’s it. It isn’t foreclosure, and it isn’t a short sale. Plenty of underwater homeowners just keep making the payment and stay put. Underwater only becomes a crisis when you have to sell or you can’t pay.
Where That Leaves You
If you’re current on your loan and staying put, none of this touches you this year. Equity is a number on paper until you sell.
If you bought in Florida between 2022 and 2025 with a small down payment, it’s worth knowing where you actually stand. Not the Zestimate. What a real agent says it will bring, minus the payoff, minus the cost of selling.
And if you’re already behind, or you can see behind from here, you have more options than most people realize. Reinstatement, forbearance, a loan modification, a regular sale, a short sale, and sometimes doing nothing for a while is the right call too. Which one fits depends on your numbers and your timeline. Nobody can tell you which one is right from a metro-level statistic, including me.
I’m in Jacksonville and I work Northeast Florida directly. If you’re somewhere else in the country, I’m not licensed to represent you, but I can point you to an agent in your market through the SFR network. Either way the questions are free.
My email is JimArmstrong904@gmail.com and my number is (904) 671-4161. Happy to answer whatever you’ve got.
Jim Armstrong, REALTOR - Momentum Realty - SFR (Short Sales and Foreclosure Resource) certified. This is general information, not legal, tax, or financial advice. Cotality, ICE and Realtor.com figures are private-company estimates, not government data.
