Top 5 States for Underwater Mortgages

Last Updated Apr 26, 2011 4:43 PM EDT

A new data set published last week by CoreLogic, a provider of real estate information and analytics, indicates that the real estate market still faces a number of substantial problems - and not all of them contain the word "foreclosure."

U.S. homeowners who are regularly making mortgage payments, and have no current desire to buy or sell, may still have a home equity crisis (or complete lack thereof) on the horizon. That could spell big trouble for anyone who used their home as a piggy bank, expecting future home value appreciation would make things right.

According to CoreLogic's data, a full 23 percent of borrowers are considered to be "underwater" in their homes, which means that they currently owe more (sometimes significantly more) to their lender than the properties are worth.

How much underwater? CoreLogic says U.S. homeowners have a whopping $750 billion in negative equity.

That a quarter of the nation's homeowners are underwater with their mortgages is disturbing enough, but if you live in Florida, Michigan or the Southwest, the situation is much more dire. Per CoreLogic, here are the top five states that, on average, contain the most underwater properties.

Top 5 States for Underwater Mortgages

  1. Nevada: 65 percent of homeowners are underwater
  2. Arizona: 51 percent of homeowners are underwater
  3. Florida: 47 percent of homeowners are underwater
  4. Michigan: 36 percent of homeowners are underwater
  5. California: 32 percent of homeowners are underwater
It probably isn't much of a surprise to see any of these states on the list, knowing what what we do about their ongoing foreclosure problems and how quickly and steeply home values have dropped.

Still, it's tough to swallow the fact that two-thirds of Nevada's borrowers, who may have never been in trouble with their mortgages, still have less than nothing to show for their investment - and would have a doozy of a time selling their property.

The numbers are awful, but it seems we haven't hit bottom yet. CoreLogic's report mirrors an industry consensus that home prices will fall an additional 5 percent to 10 percent in 2011, with a similar rise in negative equity averages.

If you sold your house today, would you turn a profit?
To view the full CoreLogic report, click here.
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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.
  • Ilyce Glink On Twitter»

    Ilyce R. Glink is an award-winning, nationally syndicated columnist, best-selling book author, and radio talk show host who also hosts "Expert Real Estate Tips," a Internet video show. She owns ThinkGlink.com as well as Think Glink Media, a privately held company that provides consulting, content and video services to companies and non-profit organizations.

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