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Housing

Just 4 States Account for a Third of Underwater Mortgages

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By Paul Ausick Updated Published
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Of nearly 44.6 million mortgaged properties in the United States at the end of the third quarter of 2014, about 5.1 million had a mortgage amount greater than the value of the property. These underwater or negative equity properties represent 10.3% of all mortgaged properties in the country. It is an improvement from the 10.7% of underwater properties at the end of the second quarter of the year.

The aggregate value of negative equity fell by $10.2 billion in the third quarter to a nationwide total of $338 billion. The data were released Thursday by research firm CoreLogic.

Some 19% of all mortgaged properties have positive equity below 20%, and 2.6% had less than 5% positive equity at the end of the third quarter. These levels are unchanged from the second quarter of 2014.

CoreLogic’s CEO noted:

Negative equity continued to decrease in the third quarter as did the level of homes mired in the foreclosure process. This should hopefully translate into less friction in the housing market as we move forward. Better fundamentals supporting homeownership in the face of higher rents should attract more first-time homebuyers to the market …

The five states with the highest percentage of homes with negative equity are Nevada (25.4%), Florida (23.8%), Arizona (19.0%), Rhode Island (14.8%) and Illinois (14.1%). Just the first four of these states account for a third of all underwater mortgages.

The five states with the highest percentages of homes with positive equity are Texas (97.4%), Alaska (97.1%), Montana (97.1%), Hawaii (96.4%),and North Dakota (96.1%).

The five metropolitan areas with the highest percentage of properties with negative equity are Tampa-St. Pete-Clearwater, Fla., (25.5%), Phoenix-Mesa-Scottsdale, Ariz., (19.3%), Chicago-Naperville-Arlington Heights, Ill., (16.3%), Riverside-San Bernardino-Ontario, Calif., (15%) and Atlanta-Sandy Springs-Roswell, Ga., (14%).

The five metro areas with the highest percentage in positive equity are Houston-The Woodlands-Sugar Land, Texas, (97.5%), Dallas-Plano-Irving, Texas, (97%), Anaheim-Santa Ana-Irvine, Calif., (96.6%), Portland-Vancouver-Hillsboro, Ore., (96.4%) and Seattle-Bellevue-Everett, Wash., (95.9%).

ALSO READ: Nevada and Florida Home Prices Remain Stalled in November

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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