According to a recently-released study by the California-based mortgage analyst, First American CoreLogic, the ‘home-value vs. debt-owed’ data indicates that the percentage of homeowners “underwater” on their mortgages rose from 18 percent in September to 20 percent in December 2008!

With the ever plunging housing values due to the economic downturn, one in every five US homeowners with mortgages owed more to their lenders than the value of their properties; and the situation is expected to go even worse in the near future.

Figures reveal that by end last year, the 8.31 million properties with negative equity marked a 9 percent increase from the September-end numbers of 7.63 million such properties. The study cautions that if there is another 5 percent drop in home values, an additional 2.16 million properties could go underwater.

As per the study, the most stressed states include California, Nevada, Florida, Arizona, and Michigan - with nearly 62 percent of underwater borrowers and only 41 percent of mortgages. Other states with mounting percentage of homes with negative equity include Washington D.C., with 44 percent increase, Connecticut with 25 percent, and Dallas with 21.1 percent increase. 

Chief economist Mark Fleming, of First American CoreLogic, said: “The accelerating share of negative equity, combined with deteriorating economic conditions, means that mortgage risk will continue to increase until the economy begins to stabilize.”

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