A whopping 11.2 million mortgage loans, or 24 percent of the country’s total, were underwater as of March 31, according to real estate research firm CoreLogic.
And that’s not underwater as in flooded basements, that’s underwater in terms of the mortgage value exceeding the home’s value.
When you add the 2.3 million homeowners on the brink of falling underwater, those with equity of less than 5 percent, the total rises to 13.5 million, or 28 percent of mortgages, AOL Finance reports.
An eye popping 4.1 million homeowners have negative equity of greater than 50 percent.
“Never before have American homeowners with mortgages held such a thin slice of equity, and never before have so many homeowners been at risk of negative equity,” writes AOL Finance columnist Charles Hugh Smith.
“Predicting accurately how many homeowners end up underwater is impossible, as the future of home prices is unknown. But anyone claiming that the number of underwater homes can't rise further is on thin ice.”
The latest S&P/Case-Shiller index of home prices for 20 big cities showed that prices gained 4.6 percent in May from a year earlier. But much of that gain stemmed from the closing of contracts that were signed before the housing tax credit expired April 30.
"We just are going to muddle through for a while," Michael Feroli, chief U.S. economist at JPMorgan Chase, told Bloomberg.
"I'm not looking for big movement from here either up or down."
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