Fewer Underwater Homeowners in the Nation Today Due to Foreclosures

By Kyle Chezum Updated on 6/8/2011

 

Though some parts of the nation are still choked with underwater homeowners, including the Miami-Dade area of Florida, the total number of underwater homeowners in the nation has decreased during the first quarter of this year.  At the end of last December, there were about 11.1 million underwater homes.  Now there are about 10.9 million.

It's a small drop, but it's a drop, and that's the important part.  But home prices have been dropping as well, a phenomenon that should be pushing more homeowners into negative equity.  The reason for the decrease in underwater homes is primarily due to foreclosures.  As foreclosures successfully occur, underwater homes are taken off the market and their mortgages eliminated or decreased.  This reduces the total number of homes with negative equity.

As mentioned above, though, certain regions of the nation are still extremely unhealthy due to high numbers of underwater homes.  Nevada is still mired in negative equity with 63% of all homes in the state underwater.  In Arizona, 50% of all homes are underwater.  In Florida, the number is 46%, in Michigan it's 36%, and in California it's 31%.  Though it's tempting to remark on the relative health of, say, California when compared against Nevada, it's important to note that a full third of all homes in California are underwater.  This is a massive number of homes.

Sam Khater, an economist with the real estate Data firm CoreLogic, made the following statement about the situation in the housing market.  He said, "We are treading water."