Underwater Mortgages Rise In Colorado, Nationally
The number of homeowners who owe more on their mortgages than their homes are worth rose at the end of last year both nationally and in Colorado.
Whether negative equity is labeled as “upside down” or “underwater” 23.1% of households fell into this category during the fourth quarter of 2010. That’s up from 22.5% in the third quarter of last year. According to data compiled by analytic and business services provider CoreLogic the number of underwater mortgages in Colorado is 19.7%. In a healthy housing market about 5% of homeowners are underwater.
This scenario typically plays out when home prices fall, which prevents many people from selling their homes in an already weak housing market. The CoreLogic data also suggests Colorado’s situation could worsen because of a high percentage of home loans considered to be at risk. But right now statewide price declines are seen as moderate.