By Michael Phillips | TXBayNews
By any measure, the housing numbers coming out of Louisiana should alarm policymakers, homeowners, and would-be buyers alike.
New data highlighted in a December 21 Daily Mail report, drawing from ATTOM’s Q3 2025 U.S. Home Equity & Underwater Report, shows Louisiana leading the nation in “seriously underwater” mortgages—homes where owners owe at least 25 percent more than the property is worth. Nearly 12 percent of mortgaged homes in the state fall into that category, compared with just 2.8 percent nationally.
Even ATTOM’s own October 2025 report, which places Louisiana’s rate slightly lower at 11.2 percent, confirms the same underlying reality: no other state is close. Fourteen of the 50 U.S. counties with the highest negative equity levels are in Louisiana, with several parishes exceeding 13 percent.
This is not a replay of the 2008 housing collapse. Nationally, most homeowners remain equity-positive, and lending standards are stronger. But Louisiana has become a regional stress test—a case study in how insurance markets, regulation, litigation, and climate exposure can quietly erode home values even as prices hit records elsewhere.
How Louisiana Became Ground Zero
The immediate drivers are not hard to identify. Repeated hurricanes and extreme weather have battered housing stock, driven up rebuilding costs, and shaken insurer confidence. Since 2020, more than a dozen homeowners insurers have gone insolvent or left the state after storms like Laura, Delta, and Ida. The result has been eye-watering premiums—often $11,000 to $14,000 per year—paired with high deductibles and non-renewals that trap homeowners.
When insurance becomes unaffordable or unavailable, buyers disappear. Home values soften. Equity evaporates.
But focusing only on climate misses half the picture.
Louisiana’s insurance crisis has also been shaped by years of heavy regulation, slow rate approvals, and a litigation environment that critics say encouraged excessive lawsuits and fraud. Smaller, under-capitalized insurers struggled to absorb losses while global reinsurance costs surged worldwide, driven not just by Gulf Coast storms but by disasters from California wildfires to European floods.
In short, storms lit the match—but policy choices and market distortions poured on the fuel.
What’s Often Left Out of the Narrative
Much of the national coverage frames Louisiana’s housing crisis as an inevitable climate catastrophe. That framing ignores several developments that matter to homeowners and taxpayers.
First, there are signs of stabilization. Reforms enacted in 2024 and 2025 under Gov. Jeff Landry and Insurance Commissioner Tim Temple have attracted new insurers back into the state. Rate increase requests have slowed, some filings show modest decreases, and companies like Louisiana Farm Bureau have resumed wind and hail coverage in higher-risk areas.
Second, mitigation works. The expanded Louisiana Fortify Homes Program—offering grants for fortified roofs and storm-resistant upgrades—has delivered real results. Homeowners who harden their properties can qualify for premium discounts of 20 to 30 percent, pulling policies away from the state’s insurer of last resort. These are targeted incentives, not blank-check subsidies.
Third, federal policy hasn’t helped. Changes to the National Flood Insurance Program under Risk Rating 2.0 led tens of thousands of Louisiana homeowners to drop coverage between 2022 and 2024, worsening affordability and market uncertainty. Delays and one-size-fits-all federal rules have compounded local problems rather than solving them.
A Center-Right Take: Fixable, Not Fatal
From a center-right perspective, Louisiana’s underwater mortgage crisis is serious—but not hopeless.
Market-oriented reforms are already showing that competition, not permanent subsidies, is the path forward. Allowing insurers to price risk realistically, streamlining approvals, and curbing abusive litigation can stabilize coverage without taxpayer bailouts. Encouraging homeowners to invest in resilience—stronger roofs, smarter construction, better mitigation—reduces risk at the source.
What this crisis does not justify is sweeping federal intervention or climate alarmism divorced from practical solutions. Adapting to risk is more effective than pretending it can be regulated away.
A Warning Beyond Louisiana
Louisiana may be the epicenter today, but it is not alone. Parts of the South, Midwest, and even high-risk areas of California are beginning to show similar pressure points as insurance markets reprice risk and affordability tightens.
The lesson is clear: housing stability depends on more than interest rates and home prices. When insurance collapses, equity follows.
Louisiana’s experience should serve as a warning—and a roadmap. Smart deregulation, targeted incentives, and resilience-focused policies can stop the bleeding. Ignoring the problem, or blaming it on a single factor, will only leave more homeowners underwater and more communities stuck in place.
Texas Bay News 
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