Friday, March 11, 2011 10:43:55 AM
Almost 1 in 4 Homes Worth Less Than Their Mortgage
Because of declining home prices at the end of last year, nearly 25% of mortgage holders in the U.S. found themselves with a home that was worth less than their home loan.
According to CoreLogic, the rate of underwater mortgages was 23.1% at the conclusion of 2010, representing 11.1 million homeowners. Another 5%, or 2.4 million borrowers, had “near negative equity” mortgages. If housing prices decline this year another 5-10%, as some experts predict, the nation could find itself with one-third of all mortgages underwater.
Things are even worse in some parts of the country. In Nevada, about two-thirds of homeowners have a mortgage with negative home equity, followed by Arizona, Florida, Michigan and California, where the rate is around 50% of mortgage holders. In Las Vegas, 69.1% of homeowners have negative equity and in Phoenix, Arizona, the rate is 56.5%.
In total, residential properties in the United States covered by mortgages are worth about $12.5 trillion, of which $3.7 trillion is equity and $8.8 trillion is debt.
Because of declining home prices at the end of last year, nearly 25% of mortgage holders in the U.S. found themselves with a home that was worth less than their home loan.
According to CoreLogic, the rate of underwater mortgages was 23.1% at the conclusion of 2010, representing 11.1 million homeowners. Another 5%, or 2.4 million borrowers, had “near negative equity” mortgages. If housing prices decline this year another 5-10%, as some experts predict, the nation could find itself with one-third of all mortgages underwater.
Things are even worse in some parts of the country. In Nevada, about two-thirds of homeowners have a mortgage with negative home equity, followed by Arizona, Florida, Michigan and California, where the rate is around 50% of mortgage holders. In Las Vegas, 69.1% of homeowners have negative equity and in Phoenix, Arizona, the rate is 56.5%.
In total, residential properties in the United States covered by mortgages are worth about $12.5 trillion, of which $3.7 trillion is equity and $8.8 trillion is debt.
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