Incidence of underwater mortgages varies greatly by region

By: Leslie Black-Plumeau

About 31 percent of American homeowners with mortgages owe more on their mortgages than their home is worth, according to a recent report from Zillow.   The incidence of the problem ranges greatly by region, however.

On a state level, Nevada has the highest percentage of homeowners with negative equity, with 67 percent "underwater."  Like most of the Northeast, Vermont has a much lower incidence of underwater mortgages.  Zillow estimates that the percentage of mortgaged homeowners underwater ranges from 9% in Addison County to 22% in Rutland County.   On the map pictured, the redder a county's shading, the higher the incidence of underwater mortgages. 

Areas with high rates of underwater mortgages are those that were hardest hit by the housing recession, where home values fell dramatically from their peak.   As home values fall, negative equity increases.   While Zillow estimates that U.S. home prices fell 25% during the recent recession, Vermont’s median price dropped less than 5%, according to property transfer tax data on the Vermont Housing Data website

Check out Zillow’s interactive map.