If you lose your job, but you’re one of the 27 million homeowners with a 2% or 3% mortgage, then your payment is cheaper than any alternative. It’s cheaper than renting and it’s cheaper than downsizing. If you are one of the 27 million and your overall debt is low – consider yourself in good shape!
At the end of 2024, 82% of mortgages carried a rate below 6% and a whopping 54% of mortgages have a rate below 4%. In fact, 82% of mortgage holders have at least 30% equity in their home. Even in a market where home prices dip — which could indeed happen in 2025 — almost no existing homeowners are at risk of being underwater. At the end of 2024, the FHFA (Federal Housing Finance Agency) reported that 0.3% of borrowers have negative equity. Those most at risk of being underwater are those who obtained a new mortgage after May 2022. Rates have been 5.5% and above since that time and equity growth has been slower since 2023.
