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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 46 June 2025 J O U R N A L underwater has stayed constant at 2 to 3% nationally. The rate in Q1 2025 is less than half of the rate in Q1 2020 (6.6%), at 2.8 percent of residences. Only 25 states and D.C. witnessed an increase in their underwater rates compared to the same period last year, even though the percentage of seriously underwater properties rose every quarter in 48 states and D.C. The biggest YoY increases in seri- ously underwater rates were in: 1. Kansas (up from 2.9% in Q1 2024 to 4.7% in Q1 2025) 2. Utah (up from 2.1% to 2.6%) 3. South Carolina (up from 3.3% to 3.8%) 4. Nebraska (up from 3.7% to 4.1%) 5. South Dakota (up from 3% to 3.4%) The states with the largest YoY drops in seriously underwater rates were: 1. Wyoming (down from 8.8% in Q1 2024 to 2.5% in Q1 2025) 2. West Virginia (down from 5.4% to 4.2%) 3. Kentucky (down from 8.3% to 7.3%) 4. Louisiana (down from 11.3% to 10.5%) 5. Oklahoma (down from 6.1% to 5.5%) Which Regions Boast the Highest Equity-Rich Homeowner Rates? In Q1 2025, the Northeast had six of the 10 states with the largest percentage of mortgaged properties deemed equi- ty-rich, with the remaining four states in the West. The states with the highest equi- ty-rich rates were: 1. Vermont (85.8%) 2. New Hampshire (60.5%) 3. Rhode Island (59.8%) 4. Montana (59.4%) 5. Maine (58.9%) The states with the lowest equity-rich rates were: 1. Louisiana (20.3%) 2. Maryland (31.4%) 3. Illinois (31.5%) 4. Alaska (31.7%) 5. North Dakota (31.9%) Equity-Rich ZIPs & Counties Lead the Way Thirteen of the fifteen counties with the highest equity-rich rates were in Michigan, Wisconsin, or Vermont, out of the 1,751 counties with at least 2,500 mortgaged properties in Q1 2025. Chittenden County, VT (91.3%), Marquette County, MI (89.8%), Benzie County, MI (88.7%), Portage County, WI (88.6%), and Manistee County, MI (88%), had the highest equity rich rates. The South had the lowest percent- ages of equity-rich properties; Louisiana accounted for nine of the 15 counties with the lowest percentage of equity-rich homes. Vernon, LA (6.3%), Iberville County, LA (8.3%), Long County, GA (9.8%), Ascension County, LA (9.9%), and Acadia County, LA (10.9%), had the lowest percentages. The largest percentage of seriously underwater properties is found in the Midwest and South. The South and Midwest accounted for 18 of the 20 states with the largest pro- portion of properties that were seriously submerged. Louisiana (10.5%), Kentucky (7.3%), Mississippi (6.6%), Arkansas (5.8%), and Iowa (5.7%) had the highest percentages of residences that were seriously underwater. Vermont (0.7%), Rhode Island (1%), New Hampshire (1.1%), Massachusetts (1.2%), and Hawaii (1.3%) had the lowest percentage of homes that were substan- tially underwater. Of the 9,144 ZIP codes with at least 2,000 mortgaged homes in Q1 2025, 3,418 (37%) had more than half of all mort- gaged properties classified as equity-rich. Overall, California accounted for over half of the 50 ZIP codes with the greatest percentages of equity-rich properties. The ZIP codes with the highest equity-rich rates were: 1. 49855 in Marquette, MI (91.66%) 2. 92657 in Newport Coast, CA (85.75%) 3. 57702 in Rapid City, SD (85.64%) 4. 94024 in Los Altos, CA (84.80%) 5. 92620 in Irvine, CA (84.51%) Of the 9,144 metro areas with at least 2,000 homes in Q1 2025, 218 (2.4%) had more than a tenth of homes substantially underwater. The ZIP codes with the largest shares of seriously underwater homes were: 1. 41501 in Pikeville, KY (31.1%) 2. 70805 in Baton Rouge, LA (31%) 3. 19132 in Philadelphia (30%) 4. 71446 in Leesville, LA (27.64%) 5. 60649 in Chicago (26.24%) In 99 of the 110 major markets, the percentage of residences with high equity fell quarter over quarter (90%). It dropped in 56 of those 110 markets (51%) from the same period last year. In conclu- sion, many Americans with underwater mortgages may be forced into foreclosure in 2025. Q1 BANKRUPTCY ACTIVITY SNAPSHOT T he first quarter of 2025 saw a moderate increase in the total number of bankruptcy filings, according to data gathered by G2 Risk Solutions (G2RS), which handles the majority of U.S. bankruptcy cases by offering bankruptcy management services to creditors and lenders. In the latter two quarters of 2024, bankruptcy filings leveled out and then declined, despite a general trend of rising filings since 2022. Filings are up 0.7% in Q1 2025 compared to Q4 2024. Data from Q1 2025 showed 125,421 filings, compared to 116,285 in the same period in 2024. Forecast filings for 2025 as a whole are expected to reach 501,000, up 1.38% from 2024 totals. Q1 Year-over-year Data — Regional (U.S.) Top States with Highest & Lowest YoY Bankruptcy Growth (by volume and percentage):