There is no doubt that the country is experiencing a slow improvement in the housing market. According to recent reports, the number of homes with negative equity has declined from 25.2 percent at the end of 2011 to 23.7 percent during the first quarter of 2012.
However, some states are struggling to catch up with this trend. The states with the most homes underwater are generally the states that were the most drastically affected by falling home prices during the economic downturn. Here’s a look at the five states that have been hardest hit.
35.6 percent of the homes in Michigan are underwater. The total property value in the state is $193.15 billion, while outstanding mortgage debt is $161.24 billion. 5.5 percent of mortgages here are more than 90 days delinquent.
Although one in three homes in Michigan is underwater, the news isn’t all bad. Michigan is the only state on this list where home prices actually rose in 2011 by 1.7 percent. The unemployment rate in Michigan is 8.5 percent, which is a big improvement over their previous standing of having the highest unemployment rate in the nation. Their unemployment rate reached 15 percent at the height of the recession.
Georgia has 37.2 percent of homes underwater. The state’s total property value is $293.01 billion, with $246.52 billion in outstanding mortgage debt. 7.2 percent of homeowners are more than 90 days delinquent on their loans.
Georgia saw a 12.7 percent decline in home prices in 2011, the highest in the country. Since 2006 home prices have dropped almost 35 percent, and experts predict they will see an additional decline of more than 4 percent this year. Georgia has the fourth highest loan-to-value ratio in the country.
43.4 percent of homes in Arizona have negative equity. The total property value in the state is $249.17 billion, with $221.71 billion in outstanding mortgage debt. 5.8 percent of mortgages here are more than 90 days late.
In the mid 2000s, Arizona helped to fuel the country’s economic growth. The state experienced increasing home values and new construction, but by 2007 things began to turn. Experts predict home prices will fall another 9 percent in 2012, more than any other state. There is some good news, though – the total property value has increased about $6 billion since the end of 2011 and the beginning of 2012, and outstanding mortgage debt has decreased by about 4.5 billion.
In Florida, 45.1 percent of homes are underwater. The total property value in this state is $777.34 billion, with $684.97 billion in outstanding mortgage debt. 16.8 percent of mortgages are more than 90 days delinquent.
Between 2006 and 2011, Florida homeowners saw home prices cut by almost 50 percent. Florida’s unemployment rate of 8.6 percent is higher than the country’s average of 8.2 percent, although not as bad as California and Nevada.
A staggering 61.2 percent of mortgages are underwater in Nevada, making this the hardest hit state. Total property value in Nevada comes in at $93.9 billion, with $106.45 billion in outstanding mortgage debt. 12.1 percent of mortgages are more than 90 days delinquent.
Home values have plummeted in this state. Between 2006 and 2011, home values have dropped almost 60 percent, more than any other state. In 2011, home prices dropped an additional 9.4 percent. Many homeowners in the state owe more on their house than it is worth, and the average loan-to-value ratio is a depressing 114 percent. In Las Vegas, 71 percent of homes are underwater. With an unemployment rate of 11.6 percent, Nevada has the most ground to cover before any recovery is to be felt.