One in Four Chicago Homeowners Upside Down

September 14, 2011

More than a quarter of all metro Chicago real estate owners are underwater.

And, we’re not talking about the liquid kind.

According to new data from the research firm CoreLogic, more than 387,500 Chicago-area homeowners owed more on their mortgages in the second quarter of this year than their homes were worth.

guy upside down holding a mortgage signThat represents 25.2 percent of homes recording “negative equity” at the end of June.

Another 5.2 percent, or more than 79,000 Chicago-area homes, were on the edge with equity in their properties at 5 percent or less. A further decline in home prices can push these owners underwater as well.

Nationally, 10.9 million homeowners, or 22.5 percent, had higher mortgages than home values at the end of this year’s second quarter. Another 2.4 million had less than 5 percent equity, which means that 27.5 percent of all U.S. homeowners had negative equity or near-negative equity mortgages.

To make matters worse, almost three-quarters of upside-down homeowners had loans that carry above-market interest rates but can’t refinance because they owe more on their homes than they’re worth.

“The hardest-hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices,” said Mark Fleming, chief economist with CoreLogic.

“High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery.”

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