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A report by CoreLogic revealed that while the number of homeowners with negative equity declined slightly during the second quarter, the overall figure is still high.
The report showed that 10.9 million Americans have underwater mortgages, representing 22.5 percent of all home loans. This total is down from 22.7 percent in the first quarter. In addition to the 10.9 million property owners with negative equity, another 2.4 million have less than five percent equity, known as near-negative equity. In all, 27.5 percent of the nation's borrowers now have either near-negative or negative equity.
Among states, Nevada had the highest percentage of homeowners with negative equity at 60 percent, followed by Arizona at 49 percent, Florida at 45 percent, Michigan at 36 percent and California at 30 percent.
The percentage of national underwater loans represented by the hardest-hit states declined between April and June, however. Overall, the top five states in terms of negative equity accounted for 38 percent of the nation's total, down from 41 percent the previous quarter.
"High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery," said Mark Fleming, chief economist with CoreLogic. "The hardest hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices."
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