SANTA ANA, Calif. — Recent good news that the national inventory of housing is down while home purchases are up have given hope that the U.S. residential real estate market is getting back on its feet. But a new report suggests another wave of foreclosures is likely on its way, with some 23% of people with mortgages now owing more than their home is worth. That means almost 10.7 million U.S. mortgages were "underwater" as of Sept. 30, according to the report by research firm First American CoreLogic.
Moreover, another 2.3 million homeowners are within 5% of negative territory, according to First American CoreLogic, meaning more than.
The analysis found the majority of underwater mortgages are primarily concentrated in five states: Nevada, at 65%; Arizona, at 48%; Florida, at 45%; Michigan, at 37%; and California, at 35%. Those states represent an unusually high number of option-adjustable rate mortgages that featured low rates on the front end, but many of which have since repriced.
