Number of underwater homes drops in all but seven states

by MPA08 Jan 2015
According to the latest CoreLogic report released today, U.S. negative equity share declined in all but seven states during the third quarter of 2014. The number of underwater homes fell from 10.9% in Q2 2014 to 10.3% in Q3 2014, and the number of underwater borrowers decreased from 5.4 million to 5.1 million.

The total dollar amount of negative equity was down $10.2 billion from the second quarter, falling to $338 billion in the third quarter 2014. Quarter over quarter, all but seven states experienced decreases in negative equity share through the third quarter, according to CoreLogic.

Below are the 25 states with the largest percentage-point change in negative equity share from the previous quarter. Michigan had the largest decrease, falling by 2 percentage points from the second to the third quarter, followed by New Mexico (-1.5%), New Jersey (-1.4%), Ohio (-1.4%) and Illinois (-1.3%).
Negative Equity Quarterly Change in Negative Equity Share 

At the metro level, Chicago  had the highest amount of total underwater dollars as of the third quarter at $16 billion, followed by New York City at $16 billion and Los Angeles at $10 billion.

Also according to CoreLogic analysis, mortgage default rates fell slightly in the third quarter. Nationally, homes with positive equity had a default rate of 0.6% and homes with negative equity had a default rate of 3.3%.

Negative equity shares broken out by price tiers suggest that there is a high concentration of negative equity mortgages in the low end of the housing market. Homes valued at less than $100,000, for example, accounted for 13.5% of the total negative equity dollars nationwide in the third quarter. Negative equity share for this category was the highest at 21.3%, more than twice the national share of 10.3%.

Homes valued between $100,000 and $200,000 made up almost a third of the total negative equity dollar amount with the second highest negative equity share of 13%. On the other end of the scale, homes valued at more than $200,000 made up 56.5% of the negative equity dollars nationwide and had a negative equity share of 6%.

Click here to read the full report.


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