REAL ESTATE TOPICS

Nearly 2 million homeowners no longer 'seriously' underwater

By Les Christie  @CNNMoney April 17, 2014: 1:02 AM ET

NEW YORK (CNNMoney)

Surging home prices have helped nearly two million homeowners get back above water on their mortgages over the past year.

During the first quarter, 9.1 million, or 17%, of homeowners were seriously underwater on their home, meaning their debt exceeded the home's value by 25% or more, according to RealtyTrac. That's down from 10.9 million, or 26%, of all properties a year earlier.

These states have the highest levels of underwater homeowners

State	Number of seriously underwater mortgages	% of all mortgages
Nevada	261,272	34%
Florida	1,717,637	321%
Illinois	747,473	30%
Michigan	410,362	29%
Ohio	584,854	27%
Rhode Island	31,302	26%
Missouri	192,256	22%
Connecticut	93,519	21%
Arizona	252,232	20%
Maryland	291,225	20%

Source: RealtyTrac
Seriously underwater mortgages are loans where debt balances exceed home values by 25% or more.

States with the highest percentage of seriously underwater homes included Nevada, Florida and Illinois.

RealtyTrac also found that fewer properties in foreclosure are underwater.

"Because of rising home prices, many of the homeowners in the foreclosure process -- more than a third -- actually have positive equity. That will enable some of them to avoid foreclosure," said Daren Blomquist, a vice president for RealtyTrac.

These homeowners could leverage the home's value to either refinance or sell their home. "But many distressed homeowners with equity may not realize they have it and in some cases have vacated the property already, assuming that their foreclosure is inevitable," he said.

Metro areas where more than half of the foreclosures actually have positive equity include Denver, Boston, Minneapolis, Houston and Washington, D.C.

RealtyTrac also reported that the number of "equity-rich" homeowners, those with 50% or more equity in their home, grew to 9.9 million in the first quarter. That represents 19% of all mortgaged homes.

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