‘Seriously underwater’ homeowner ranks are thinning, but many are still in trouble.

Nearly seven million homeowners owe 125% or more of their home’s value, according to RealtyTrac

Andrea Riquier | Marketwatch

underwaterThe housing market is healing, but some pockets of distress remain.

At the end of the first quarter there were 6.7 million homeowners who are seriously underwater, data provider RealtyTrac said Thursday. That means the homeowner owes at least 125% of the value of the home.

Those homeowners make up 12% of all mortgages, less than half the 28.6% reached at the peak of the housing crisis in 2012. That number keeps falling steadily: it was 638,000 lower than in the first three months of 2015.

But despite overall improvement, some metro areas saw a yearly increase compared to the first quarter last year. In Columbus, Ohio, the share of seriously underwater properties increased 18%, while in Charlotte, North Carolina, the share jumped 17%.

State Share of homes with mortgage at least 25% more than home value
Nevada 22.6%
Illinois 22.3%
Ohio 20.8%
Florida 18.8%
Michigan 17.7%

Nearly all — 98% — of homes that are seriously underwater are not in the foreclosure process, RealtyTrac noted, but conversely, 28.8% of homes in foreclosure are seriously underwater. States with the highest share of homes in foreclosure that are seriously underwater include Illinois, at 47.3%, and Nevada, 43.6%.


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May 2016