The percentage of homeowners who are underwater on their mortgages has increased in Idaho, even as the local housing market has begun to improve.
Data collected by CoreLogic show there’s a larger percentage of underwater mortgages in the Gem State than the U.S. average.
Negative equity, often referred to as ‘underwater’, simply means a homeowner owes more on their mortgage than their house is actually worth.
Brookings Mountain West director Robert Lang says the measure can often be predictive of the foreclosure risk in an area. Lang says there are always people who owe more on their home than it’s actually worth, which isn’t necessarily a problem as long as those people have steady income. “It’s when it’s combined with high unemployment that it’s a problem,” Lang says.
The percentage of underwater residential mortgages has been trending down in some states. The U.S. average for the first quarter of this year is at 23.7 percent. In Idaho, it’s 26.3 percent.
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Lang says there are two reasons why the rate could be going up here: near-flat housing values and some people could be using the current market as an opportunity to get a new mortgage at a lower interest rate, and that mortgage could be worth more than the current one.