An estimated 11 million U.S. homeowners owed more on their mortgages than their homes were worth at the end of June, according to a new report from data aggregator CoreLogic.

While the number of homes underwater actually declined by about 200,000 from an estimated 11.2 million in March, the biggest driver of that improvement was foreclosures, rather than price increases, CoreLogic said.

An estimated 11 million U.S. homeowners owed more on their mortgages than their homes were worth at the end of June, according to a new report from data aggregator CoreLogic.

While the number of homes underwater actually declined by about 200,000 from an estimated 11.2 million in March, the biggest driver of that improvement was foreclosures, rather than price increases, CoreLogic said.

For those who owe more than their homes are worth — about 23 percent of all mortgage holders — the bad news is that the CoreLogic report demonstrates a strong correlation between home-price appreciation and homeowner equity.

In the first six months of 2010, homeowners with little or no equity in their properties saw their home’s value fall by more than 1 percent on average, the report said. For homeowners underwater by 50 percent or more, property values fell by 2 percent, on average.

In contrast, homeowners with equity of 50 percent or more saw their property values increase by more than 1 percent during the same period. Homeowners with 25 to 50 percent equity in their properties saw a slight increase in value — 0.2 percent on average.

As a result, the largest decrease in negative equity occurred among homeowners with loan-to-value (LTV) ratios in excess of 125 percent. The number of homeowners with this level of "severe negative equity" fell to 4.8 million, down from 5 million during the first quarter, as many lost their homes.

"Negative equity continues to both drive foreclosures and impede the housing market recovery," said Mark Fleming, chief economist with CoreLogic, in a statement. "With nearly 5 million borrowers currently in severe negative equity, defaults will remain at a high level for an extended period of time."

CoreLogic said the number of underwater borrowers peaked in the fourth quarter of 2009, and has declined by about 350,000 since then.

The biggest declines in negative equity were concentrated in states with the highest share of underwater borrowers. Nevada experienced an 11.8-percentage-point decline in negative equity share, followed by California, Florida and Arizona (-1.3 percent).

Top 10 states with highest share of negative equity mortgages
1. Nevada (68 percent of 592,000 mortgages)
2. Arizona (50 percent of 1.3 million mortgages)
3. Florida (46 percent of 4.5 million mortgages)
4. Michigan (38 percent of 1.4 million mortgages)
5. California (33 percent of 6.9 million mortgages)
6. Georgia (28 percent of 1.6 million mortgages)
7. Idaho (24 percent of 243,000 mortgages)
8. Virginia (23 percent of 1.2 million mortgages)
9. Maryland (22 percent of 1.4 million mortgages)
10. Utah (20 percent of 470,000 mortgages)

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×