A report released Monday reveals a slight improvement in the number of negative equity (or “underwater”) mortgages in the third quarter of 2010.
Consumer data company CoreLogic’s latest data shows that nationwide 22.5 percent of all residential properties with mortgages were in negative equity at the end of the third quarter of 2010, down from 23 percent in the second quarter. According to the report (.pdf), this was due “primarily to foreclosures of severely negative equity properties rather than an increase in home values.”
Florida still remains one of the states hit the hardest by the mortgage crisis, behind just Arizona and Nevada in the list of states with the most negative equity:
Negative equity remains concentrated in five states: Nevada, which had the highest negative equity percentage with 67 percent of all of its mortgaged properties underwater, followed by Arizona (49 percent), Florida (46 percent), Michigan (38 percent) and California (32 percent).
Those states experienced the largest decline in negative equity in the third quarter, with Florida experiencing a decline of 0.9 percent. “Negative equity is a primary factor holding back the housing market and broader economy,” said Mark Fleming, chief economist with CoreLogic, in a press release. ”The good news is that negative equity is slowly declining, but the bad news is that price declines are accelerating, which may put a stop to or reverse the recent improvement in negative equity.”