The side effects of the housing bubble are still being felt by some borrowers. With the help of rising home prices, thousands of homeowners in the first quarter no longer owed more on their mortgages than what their properties were worth. However, millions of Americans are still upside-down on their homes.
During the first three months of the year, 312,000 residential properties regained positive equity, according to the latest reading from CoreLogic. Despite the rebound, there are 6.3 million homes in the United States with a mortgage still suffering from negative equity, and 10.1 million borrowers technically have equity but are very close to underwater status. The national aggregate value of negative equity homes totaled $383.7 billion in the first quarter, down from $400 billion in the previous quarter.
“Despite the massive improvement in prices and reduction in negative equity over the last few years, many borrowers still lack sufficient equity to move and purchase a home. One in five borrowers have less than 10 percent equity in their property, which is not enough to cover the down payment and additional costs associated with a conventional mortgage,” said Sam Khater, deputy chief economist of CoreLogic, in the report.
Let’s take a look at 10 states with the highest negative equity rates.