'Underwater'-homeowner ranks remain high
It doesn't look like many underwater homeowners will be surfacing anytime soon.
About one in five borrowers in the Baltimore region owe more on their mortgages than their homes are worth, a figure virtually unchanged all year, according to new estimates from real estate data firm CoreLogic. The company's negative-equity estimate has hovered around 19 percent from the first through third quarters, affecting about 120,000 homes.
It's hard to expect anything different for the time being. Home prices continue to drop, eating away at the progress borrowers make via monthly payments. About 33,000 more homeowners in the region are just barely keeping their heads above water, with their values no more than 5 percent above the amount they owe, CoreLogic said.
But Baltimore and its surrounding counties are collectively doing better than the state as a whole, according to CoreLogic. About 23 percent of borrowers in Maryland are underwater, seventh highest among the states.
Maryland's figure is a lot higher than New York and North Dakota -- both under 7 percent -- but still far outpaced by the worst-off states, including Nevada (58 percent) and Arizona (47 percent).
The Baltimore region is middle-of-the-pack for negative equity among the 50 largest metro areas, CoreLogic says. Las Vegas is over 60 percent -- ouch. At the other extreme is Nassau-Suffolk, N.Y. (Long Island), with about 5 percent.
Home equity loans are contributing to a substantial chunk of negative equity, though they're not the only reason people are underwater. Here's the breakdown nationwide, according to CoreLogic:
• About 60 percent of the negative-equity borrowers don't have home equity loans. Their average mortgage balance is $222,000, $52,000 more than their average home value.
• The remaining 40 percent of the negative-equity crowd does have a home equity loan. Their average mortgage balance, including that add-on loan: $309,000, $84,000 more than their home's value.
• Homeowners who don't have home-equity loans are much less likely to be underwater than those who do. Eighteen percent of borrowers who haven't tapped their home equity owe more on their mortgages than their homes are worth, compared with 38 percent who did pull cash out.
"Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness," Mark Fleming, CoreLogic's chief economist, said in a statement. "The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy."