12 American Cities Where Homeowners Are Drowning In Their Mortgages

phoenix, arizona

Photo: Alan Stark via Flickr

In Q3, 14 million or 28.2 per cent of American homeowners were in negative equity – in which a borrower owes more on their mortgages than their home worth –  according to the latest negative equity report from Zillow.

The number is actually down from 30.9 per cent the previous quarter thanks to rising home prices.But Stan Humphries, chief economist at Zillow said negative equity rates and home prices face risks from the broader economy.

“While we’re moving in the right direction, a substantial number of homes are still locked up in negative equity, unable to enter the existing re-sale market despite the desires of their owner. The housing market has found real momentum of its own, but is not immune from shocks to the broader economy. If negotiations centered on resolving the fiscal cliff don’t inspire confidence in investors and consumers alike, recent home value gains – and, as a result, falling negative equity rates – could stall.”

We pulled the 12 U.S. cities where the rate of homeowners in negative equity (i.e. underwater on their mortgages) is highest.

Note: Delinquency rate is the per cent of homes that are over 90 days late on their mortgage payments.

Seattle, Washington

Negative equity share:
34.2 per cent

Total amount of negative equity:
$20.58 billion

Delinquency rate:
11.0 per cent

39.7 per cent of underwater homeowners owe 20 per cent or less, while 9.3 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Minneapolis-St. Paul, Minnesota

Negative equity share:
35.5 per cent

Total amount of negative equity:
$15.51 billion

Delinquency rate:
4.8 per cent

41.5 per cent of underwater homeowners owe 20 per cent or less, while 8.1 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Chicago, Illinois

Negative equity share:
36.6 per cent

Total amount of negative equity:
$51.07 billion

Delinquency rate:
12.6 per cent

34.1 per cent of underwater homeowners owe 20 per cent or less, while 14.2 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Miami-Fort Lauderdale, Florida

Negative equity share:
41.4 per cent

Total amount of negative equity:
$39.08 billion

Delinquency rate:
25.5 per cent

23.4 per cent of underwater homeowners owe 20 per cent or less, while 29.1 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Tampa, Florida

Negative equity share:
43.2 per cent

Total amount of negative equity:
$14.43 billion

Delinquency rate:
18.4 per cent

26.9 per cent of underwater homeowners owe 20 per cent or less, while 20.1 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Sacramento, California

Negative equity share:
44.7 per cent

Total amount of negative equity:
$16.98 billion

Delinquency rate:
8.2 per cent

31.8 per cent of underwater homeowners owe 20 per cent or less, while 17.5 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow


Detroit, Michigan

Negative equity share:
45.2 per cent

Total amount of negative equity:
$22.10 billion

Delinquency rate:
5.8 per cent

24.2 per cent of underwater homeowners owe 20 per cent or less, while 27.0 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Phoenix, Arizona

Negative equity share:
45.5 per cent

Total amount of negative equity:
$29.90 billion

Delinquency rate:
7.7 per cent

27.3 per cent of underwater homeowners owe 20 per cent or less, while 21.3 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Riverside, California

Negative equity share:
47.3 per cent

Total amount of negative equity:
$35.03 billion

Delinquency rate:
10.8 per cent

30.4 per cent of underwater homeowners owe 20 per cent or less, while 20.7 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Orlando, Florida

Negative equity share:
47.7 per cent

Total amount of negative equity:
$14.1 billion

Delinquency rate:
19.0 per cent

25.2 per cent of underwater homeowners owe 20 per cent or less, while 23.3 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Atlanta, Georgia

Negative equity share:
50.4 per cent

Total amount of negative equity:
$34.0 billion

Delinquency rate:
7.9 per cent

28.1 per cent of underwater homeowners owe 20 per cent or less, while 20.6 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Las Vegas, Nevada

Negative equity share:
63.0 per cent

Total amount of negative equity:
$20.76 billion

Delinquency rate:
14.2 per cent

22.9 per cent of underwater homeowners owe 20 per cent or less, while 33.3 per cent of underwater homeowners owe more than double what their home is worth.

Source: Zillow

Now check out cities where foreclosures are still a massive problem...

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