Core Insights - The housing market has seen significant price corrections in certain regions, particularly in Cape Coral and Austin, with declines of -19.1% and -27.8% respectively from their peaks [1] Group 1: Mortgage Borrowers and Negative Equity - The share of U.S. homeowner mortgages with negative equity is projected to rise to 2.1% by the end of December 2025, up from 1.3% in December 2024 [3] - Historically, the share of outstanding homeowner mortgages with negative equity was 23.0% at the end of September 2009 [3] Group 2: Reasons for Limited Negative Equity - Nationally aggregated existing home prices remain close to all-time highs, mitigating the impact of regional price declines [4] - Many homeowners locked in ultra-low mortgage rates during the Pandemic Housing Boom, with 51.5% of outstanding mortgage holders having rates below 4.0% as of Q4 2025, allowing for faster equity build-up [4] - A limited number of buyers purchased at the peak in correction markets, which has helped prevent widespread negative equity issues [4]