6.4 Million Still Underwater

Data for the fourth quarter is not yet available, but CoreLogic, an Irvine, California based company providing financial, property and consumer information states that nearly 6.4 million homes in America are still underwater.

The 6.4 million figure represents approximately 13 percent of all residential properties nationwide which are still showing negative equity, thus owing the bank more than what the property is worth on the market.  The CoreLogic information reflects data through the third quarter of last year.

Their report found that properties typically considered on the “low end” of the economic scale were more greatly impacted.  CoreLogic data shows that 92 percent of homes worth more than $200,000 had positive equity; whereas only 82 percent of the homes valued less than $200,000 had equity.

Also the CoreLogic analysis shows that a small key segment of the states nationally are bearing the burnt of the problem. Just five states accounted for more than one-third of all the underwater homes nationally.

Nevada, which was severely hit by the foreclosure meltdown that started in 2008, still leads the way in underwater homes with 32.2 percent of properties still upside down.  Nevada was followed by Florida, another hard hit state, which has 28.8 percent of homes owing more than what they are worth.  These two states are followed by Arizona within 22.5 percent underwater, then Ohio with 18.0 percent and Georgia at 17.8 percent.

Recently Reuters News reported that a “new wave” of mortgage trouble is appearing.  The news agency reported a “worrying rise” in the number of US borrowers who are frequently missing payments on the home equity lines of credit they took out during the housing bubble.

The Reuters report warned that as mortgage interest rates rise, consumers’ payments on these lines of credit will increase also, because the loans usually carry floating interest rates.

 

Kevin Hartmann