By DON FENLEY

Tri-Cities seriously underwater mortgages jumped 29% year over year in the fourth quarter of 2025. The increase, as reported in ATTOM’s Q4 U.S. Home Equity and Underwater Report, marks one of the clearest signals yet that equity stress is expanding beyond isolated neighborhoods and becoming a broader market condition.

Underwater mortgages increased 17% from last year, according to ATTOM’s report. CEO Robert Barter said that even with the uptick in seriously underwater homes, the overall equity levels remained remarkably strong by historical standards. “As we move toward the spring buying season, these numbers suggest a housing market that is stabilizing rather than overheating.”

The data shows every regional ZIP code tracked by the analysis posted higher underwater counts compared with Q4 2024. It’s a signal that negative equity is no longer a fringe issue. What began as a pressure point among a handful of affordability-driven purchases has now spread across both urban cores and secondary markets.

Sullivan County ZIP codes posted the largest raw increases, while Carter, Unicoi and Washington Co., VA recorded some of the fastest percentage gains.

In practical terms, this means a growing share of homeowners now owe more than their properties are worth.

Kingsport- and Bristol-area ZIP codes produced the largest absolute increases, reflecting their higher transaction density and older housing stock.

Carter Co., Unicoi Co. and Washington Co., Virginia posted year-over-year gains approaching or exceeding 50%. These communities attracted affordability buyers over the past several years, many of whom entered with smaller down payments and thinner equity cushions.

Washington Co. TN remains comparatively stable. While underwater counts rose. The increases were more moderate, suggesting newer housing stock and higher-income buyer profiles are helping buffer short-term risk.

Strategic Interpretation

Two distinct stress engines are now shaping the regional housing landscape.

The first is urban volume stress, centered in Sullivan County and Bristol. These markets carry the highest concentration of legacy housing and pandemic-era transactions, making them more exposed as appreciation slows and carrying costs rise.

The second is peripheral affordability stress, emerging in Carter, Unicoi and Washington Co., VA. These areas captured overflow demand from higher-priced cores, but their buyers tend to be more payment-sensitive and less equity-rich.

Although the Q4 underwater data show growing economic stress, the local housing market remains at the top of ATTOM’s list of markets least vulnerable to a downturn.

Categories: REAL ESTATE