Twenty-three percent of all residential properties with a mortgage were in negative equity at the end of 2010, according to data from Santa Ana, Calif.-based CoreLogic.
The number of properties with negative equity increased from 10.8 million (22.5%) in the third quarter of 2010 to 11.1 million in the fourth quarter. The increase in negative equity can be attributed to price declines and falling property values in late 2010, said CoreLogic in a report accompanying the data. Additionally, 2.4 million borrowers had “near-negative equity,” or less than 5% equity in the fourth quarter.
Regionally, the states with the highest negative equity percentage were Nevada (65%), followed by Arizona (51%), Florida (47%), Michigan (36%) and California (32%).
Looking ahead, “The consensus is that home prices will fall another 5% to 10% in 2011,” the report states. If so, the most that negative equity will rise is another 10 percentage points, all else equal.”
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Written by Elizabeth Ecker