Business, Economics and Jobs

More than 30% of US homeowners with mortgages are underwater


A pre-foreclosure sign in front of a home in Miami on Sept. 16, 2010.


Joe Raedle

Real estate website Zillow reports that the percentage of US homeowners with mortgages who owe more than their homes are worth was 31.4 percent in the first quarter, according to CNN. That’s an improvement from a year ago, when 32.4 percent of all borrowers were underwater, but slightly more underwater borrowers than three months earlier.

In some states the percentage of underwater borrowers is significantly higher than the national average, including Arizona (52 percent), Georgia (46.8 percent), Florida (46.3 percent) and Michigan (41.7 percent), Zillow data show, according to MSNBC. Nevada borrowers are struggling the most: Two-thirds of homeowners with mortgages there have negative equity in their homes.

While home prices have started to inch up again, delays in the processing of foreclosures means many delinquent borrowers are still on the books, keeping the underwater homeowner percentages high, Zillow said, according to CNN.

More from GlobalPost: US existing home sales rise 3.4% in April

A high percentage of underwater borrowers is bad for the economy, the Los Angeles Times noted.

According to the LA Times:

Negative equity has created a drag on mobility and home-price appreciation as people have gotten stuck in their homes.

However, Zillow data show, nine out of 10 underwater borrowers are making their mortgage and home loan payments on time, MSBNC reported.

"[It's] important to note that negative equity remains only a paper loss for the vast majority of underwater homeowners," Stan Humphries, Zillow's chief economist, told CNN. "As home values slowly increase and these homeowners continue to pay down their principal, they will surface again."

More from GlobalPost: Turkey’s woman at the top