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Pandemic Boomtowns Face Rising Underwater Mortgages Crisis

6/26/2025

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Summary

Story summary

Homeowners in pandemic boomtowns like Austin and Cape Coral are increasingly underwater on their mortgages.
In April, over 500,000 homeowners reported underwater mortgages, the highest level since 2020.
Tighter lending standards and a robust job market help mitigate the risk of widespread foreclosures.
Low-down-payment loans represent 75% of underwater mortgages, significantly affecting first-time buyers.

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Story summary

Homeowners in pandemic boomtowns like Austin and Cape Coral are increasingly underwater on their mortgages.
In April, over 500,000 homeowners reported underwater mortgages, the highest level since 2020.
Tighter lending standards and a robust job market help mitigate the risk of widespread foreclosures.
Low-down-payment loans represent 75% of underwater mortgages, significantly affecting first-time buyers.