If you owe more than your Minnesota home is worth
Minnesota saw the sharpest drop in home equity in the country over the past year. If you are watching your loan balance get close to what your house would sell for, here is what the numbers actually say, and what they do not.
What the report found
ATTOM, a national property data company, publishes a quarterly report on home equity. In its report covering the second quarter of 2026, ATTOM reported that 12.1 percent of Minnesota homes with a mortgage were seriously underwater, the highest share of any state.
Seriously underwater has a specific meaning in that report. It means the owner owes at least 25 percent more than the home's estimated market value. Not a little behind. A balance of at least 125 percent of what the house would likely sell for.
Twelve months earlier, ATTOM put that figure at 2.6 percent. The national figure today is 3.2 percent.
ATTOM also reported that the share of Minnesota homeowners it classifies as equity rich fell from 37.6 percent to 20.1 percent over those same twelve months. That was the largest annual decline of any state.
A caveat worth saying out loud
A move from 2.6 percent to 12.1 percent in a year is very large, and Minnesota home prices, mortgage delinquencies and unemployment did not move anywhere near that much over the same period. That mismatch is worth noticing. Some of this may reflect a change in how the underlying valuations are calculated rather than a change in what Minnesota homeowners actually owe.
We are not in a position to settle that question. What we can tell you is what the report says, and that the honest version of it includes this caveat. The number that matters for you was never a statewide percentage anyway. It is your loan balance against what your specific house would sell for right now.
Where this is and is not happening
The statewide figure is not a Twin Cities figure. ATTOM's release names Sherburne County specifically, and coverage of the report points to Isanti, Mille Lacs, Todd and Meeker counties as carrying the worst numbers in the state. Those are not metro counties.
If you are in Hennepin, Ramsey, Dakota or Anoka, the state number does not tell you much about your own block. It is a reason to check where you stand, not a reason to panic.
What it changes if you were thinking about selling
If you owe more than the house is worth, a traditional sale gets harder, because closing costs and commissions come out of proceeds that may not be there. That is the practical problem, and it is worth understanding before you list.
It does not mean you are out of options. Which paths apply depends on your loan, your timeline, and what you need to have happen next. Some of them involve selling. Several of them do not.
What it does not change
It does not mean you did anything wrong. Equity moves for reasons that have nothing to do with the people living in the house, and a valuation model changing its mind about your neighborhood is not a judgment about you.
If you want to talk it through
We buy houses in Minnesota, and we spend a fair amount of time telling people that selling is not their best move. If you want to understand your own numbers and what your options actually are, we will walk through it with you. No pressure and no obligation.
