The number of mortgaged homes with negative equity fell slightly in the first quarter, to 11.2 million units, according to figures compiled by First American CoreLogic.

The unit of First American Corp. of Santa Ana, Calif., said Monday that almost a quarter (24%) of U.S. homes are "underwater" while 28% have negative or "near-negative" equity. (Roughly 2.3 million borrowers have less than 5% equity.)

In the fourth quarter, 11.3 million homes had negative equity. Basing its research on a database of 47 million loans, the company noted that underwater mortgages are concentrated in just five states: Nevada (where 71% of mortgaged homes have negative equity); Arizona (51%); Florida (48%); Michigan (39%); and California (34%).

"The aggregate dollar value of negative equity for these deeply underwater borrowers was $656 billion," First American CoreLogic said.

CoreLogic's chief economist, Mark Fleming, said that negative equity and unemployment have stabilized over the past six months, and that this bodes well for home values.

"As house prices grow again and borrowers pay down their mortgage debt, negative equity levels will begin to diminish," he said. "The typical underwater borrower will likely regain their lost equity over the next five to seven years," Fleming said.

First-quarter figures from CoreLogic show that borrowers with second liens or home equity lines of credit are twice as likely to be underwater than borrowers with only a first mortgage — and twice as likely to end up in foreclosure.

"The foreclosure rate for borrowers with junior liens was 4% compared to 2% for borrowers without junior liens," the report says.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.