As the housing market improves, fewer local homeowners are “underwater” on their home mortgages. Homeowners are considered to be underwater or “upside down” when the amount that they owe on their mortgage exceeds the value of the home.
A new report from Irvine, California-based property information and data provider CoreLogic, Inc., on negative equity found that 13.3 percent of residential properties in the Twin Cities were underwater at the end of the second quarter. That represents 72,650 metro properties and shows an improvement from the negative equity rate of 18.1 percent for the second quarter of 2012.
The local negative equity rate peaked at 21.7 percent in the fourth quarter of 2011.
On balance, the Minnesota housing market is in healthier shape that the overall United States. Across the state, 12.6 percent of homes are in negative equity territory, down from 17.1 percent a year ago.
The current national average negative-equity rate is 14.5 percent, according to CoreLogic’s latest numbers.
Nevada has the highest negative equity rate in the country at 36.4 percent. Five states—Nevada, Florida, Arizona, Michigan, and Georgia—account for 34.9 percent of the negative equity across the nation.
Throughout 2010 and 2011, about one in four U.S. mortgages was underwater, according to CoreLogic. Climbing home prices have helped to lift some homeowners into better shape.
“Equity rebuilding continued in the second quarter of this year as the share of underwater mortgaged homes fell to 14.5 percent,” Mark Fleming, chief economist for CoreLogic, said in a statement. “In just the first half of 2013, almost three-and-a-half million homeowners have returned to positive equity, but the pace of improvement will likely slow as price appreciation moderates in the second half.”