As U.S. home prices fall, an alarming number of buyers are underwater

Surging mortgage rates aren't just raising the cost of purchasing a new home. An alarming number of recent homebuyers have discovered they already owe more on their property than it's worth, according to a new analysis.

Some 250,000 people who took out a mortgage this year to buy a home are now underwater, meaning they owe more on their loan than the home is worth, Black Knight, a mortgage software provider, found. Another million have less than 10% equity.

Those unlucky homebuyers got caught in the crunch between historically high housing prices and rapidly rising mortgage rates, which in recent months have caused real estate values to slide.