Study: 10 percent of Milwaukee-area homeowners upside down on mortgage

Numbers are improving from 2014

Just over 10 percent of homeowners in the Milwaukee area owed more than their home was worth in the third quarter of 2015, according to a national study.

In Milwaukee, Waukesha and West Allis, 27,714, or 10.2 percent, of all residential properties with a mortgage were in negative equity during the third quarter of 2015, according to a report by CoreLogic, an Irvine-Calif.-based provider of property analytics and data.

The results are better than the third quarter of 2014, when 34,541, or 12.8 percent of homeowners had a negative equity on their mortgage. An additional 8,350, or 3.1 percent, of properties were in near negative equity for the third quarter, compared with 10,315, or 3.8 percent, in the third quarter of 2014.

“Home price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market,” said Frank Nothaft, chief economist for CoreLogic. “In the last three years, borrowers with at least 20 percent equity have increased by 11 million, a substantial uptick that is driving rapid growth in home equity organizations.”

Nationally, 256,000 properties regained equity in the third quarter of 2015, bringing the total number of mortgaged residential properties with equity at the end of the third quarter to approximately 46.3 million, or 92 percent of all homes with an outstanding mortgage.

Borrower equity increased year over year by $741 billion in the third quarter 2015 nationwide.

The total number of mortgaged residential properties with negative equity stood at 4.1 million, or 8.1 percent, in the third quarter, according to CoreLogic. That is down  20.7 percent year over year from 5.2 million homes, or 10.4 percent, compared with the third quarter of 2014.

Negative equity, often referred to as “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or a combination of both.

Other national highlights include:

  • Nevada had the highest percentage of mortgaged residential properties in negative equity at 19 percent, followed by Florida at 17.8 percent.
  • Texas had the highest percentage of mortgaged residential properties in positive equity at 97.9 percent, followed by Alaska at 97.7 percent.

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