The Southern state drowning in homes worth less than what their owners still owe on them
The property outlook in one Deep South state is looking increasingly grim for homeowners struggling to keep up with their mortgage payments.
Louisiana is currently facing the most severe mortgage-equity crisis in the US, as the state has the highest number of ‘seriously underwater’ mortgages in the country, where a home’s worth is less than what is owed on it.
A whopping 11.9 percent of homes in the Bayou State had seriously underwater mortgages in the third quarter of 2025, up from 10.5 percent a year earlier, according to a report from property data provider ATTOM.
Just 2.8 of mortgages nationwide were considered seriously underwater in the third quarter.
A seriously underwater home is defined as having a loan-to-value ratio of 125 percent or above, meaning the property owner owes at least 25 percent more than the estimated market value of the home.
‘Softening home prices, easing buyer demand, and lower incomes all contribute to a higher concentration of underwater mortgages in the South compared to other regions,’ said Hannah Jones, senior economic research analyst at Realtor.com.
‘As prices and demand weaken, homeowners have a harder time selling and may find themselves struggling to keep up with mortgage payments.’
In Louisiana specifically, insurance and utility costs linked to natural disasters have created an unprecedented affordability crisis, explained Andreanecia M. Morris, executive director of the nonprofit HousingNOLA, which develops strategies for improving housing policies across the state.
A whopping 11.9 percent of homes in Louisiana had seriously underwater mortgages in the third quarter of 2025 (pictured: Baton Rouge
In all, the Bayou State accounted for 14 of the 50 counties with the highest share of seriously underwater homes (pictured: Monroe)
An assessment that determined Louisiana had the most underwater mortgages comes at a time when the national median home price reached a record of $375,000 (pictured: Lake Charles)
‘Louisiana is ground zero for the disasters that climate change has wrought across the country,’ she told the Daily Mail.
‘For the last 20 years, Louisiana homeowners and renters have been battered not just by hurricanes, but extreme weather events that have weakened the housing stock.
Hannah Jones, senior economic research analyst at Realtor.com
‘This, combined with systemic failures to prioritize housing investments and ensure an equitable recovery, have created another perfect storm and a mass displacement event that is costing us thousands of residents and citizens and residents going under.’
Morris added that severe weather is preventing property owners from making home improvements that safeguard them in the long run.
Nationwide, the share of seriously underwater mortgages is less dramatic but nonetheless concerning.
The national rate of 2.8 in the third quarter is up from 2.4 percent in 2024, according to ATTOM.
In several other states — mostly across the South and Midwest — the share of homeowners owing far more than their properties’ worth remains stubbornly high.
Illinois, Pennsylvania and Arkansas also stood out for their rate of seriously underwater mortgages, and the problem can be traced to specific counties that are particularly in trouble.
Louisiana had five counties where 13 percent or more of homes were defined as seriously underwater (pictured: Monroe)
In struggling states like Louisiana, a mortgage that far exceeds the property’s current value can leave borrowers frozen (pictured: Alexandria)
Lake Charles, Louisiana
For instance, Louisiana had five counties where 13 percent or more of homes were defined as seriously underwater.
The included Calcasieu Parish, home to Lake Charles; Rapides Parish, home to Alexandria; Ouachita Parish, home to Monroe; and East Baton Rouge Parish.
In all, the Bayou State accounted for 14 of the 50 counties with the highest share of seriously underwater homes.
In struggling states like Louisiana, a mortgage that far exceeds the property’s current value can leave borrowers frozen.
They are unable to sell without taking a loss, and they face a tough decision about whether to keep paying a loan worth more than the home itself. And if they don’t pay, they can default and be foreclosed on.
Across the US, the majority of homeowners still enjoy positive equity, and national metrics suggest the housing market remains more stable than it was during the depths of the 2008 financial crisis.
But ATTOM reports that the deep regional disparities in mortgage equity, with some communities still bearing the brunt, suggest anyone refinancing, selling, or contemplating moving should be particularly cautious.
For instance, California was named the riskiest market in the US to buy, with ATTOM using factors such as affordability, the share of seriously underwater mortgages, foreclosure activity, and county-level unemployment rates to determine its status.
As for least risky, Wisconsin leads the nation, with Tennessee Montana, New Hampshire, and Virginia following, according to the report.