GSIG LLC
11.3 million homeowners now owe more on their mortgages than the value of their home. According to research released by First American CoreLogic, “The Sand States” (California, Florida, Arizona and Nevada) are taking four of the top five in negative equity, or underwater markets.
The number of “upside-down” borrowers represents 24% of all residential properties with mortgages in the United States and an increase from 10.7m, or 23% of all residential mortgage borrowers at the end of the third quarter.
Mark Fleming, chief economist with First American CoreLogic states:
“Negative equity is a significant drag on both the housing market and on economic growth. It is driving foreclosures and decreasing mobility for millions of homeowners. Since we expect home prices to slightly increase during 2010, negative equity will remain the dominant issue in the housing and mortgage markets for some time to come.”
Among the top five states, upside-down mortgages accounted for 42% of all loans, while they only took a 15% share in the remaining 45 states. Nevada, at 70%, was the state with the highest percentage of negative equity borrowers, followed by Arizona (51%), Florida (48%), Michigan (39%) and California (35%).
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