Fewer than 1 in 5 Homes Now Underwater, But Buoyancy Varies

<pOver three-quartersrnof a million homeowners emerged from being underwater on theirrnmortgages during the first quarter of 2013 and 39 million households</bnow have positive equity in their homes. However, millions of thosernhomeowners are only narrowly in that position. CoreLogic reportedrnWednesday that 850,000 more homes returned to a state of positivernequity between January and March.</p<pNegative equity,rnoften referred to as "underwater" or "upside down," meansrnthat borrowers owe more on their mortgages than their homes arernworth. Negative equity can occur because of a decline in value, anrnincrease in mortgage debt or a combination of both. </p<pAt the end of thernquarter 9.7 million households or 19.8 percent of all properties withrna mortgage remained underwater compared to 10.5 million homes or 21.7rnpercent of mortgaged properties at the end of the fourth quarter ofrn2012. The aggregate value of underwater property decreased morernthan $50 billion to $580 billion quarter-to-quarter. CoreLogic saidrnthis decrease was largely driven by rising home prices.</p<pBut many of thernhomes in positive territory remain on shaky ground. Of those 39rnmillion properties, 11.2 million have less than 20 percent equity,rnwhat CoreLogic calls “under-equitied” and may have a morerndifficult time refinancing. Another 2.1 million had less than 5rnpercent equity, referred to as near-negative equity. Thesernproperties are at risk of returning to negative status should homernprices fall. Under-equitied mortgages account for 23 percent ofrnmortgaged properties. The average amount of equity for allrnproperties with a mortgage is 32.8 percent.</p