Cape Coral is showing signs of financial stress in the housing market, with 27% of 2023 and 2024 home loans now underwater, according to ICE Mortgage Technology’s July Mortgage Monitor report. That places the city among the nation’s most vulnerable markets, alongside Austin, Texas, where 18% of 2022 loans have negative equity. Nationally, home price growth slowed to 1.3% in early June, with nearly one-third of major markets seeing declines of at least 1%. While softening prices may ease affordability, they are eroding equity for recent buyers, particularly those with low-down-payment FHA or VA loans. ICE also flagged increasing use of adjustable-rate and temporary buydown mortgages, as well as the return of student loan collections, as key affordability pressures. Borrowers delinquent on student loans are four times more likely to be behind on mortgages.