Thanks to a sharp increase in home prices in the second quarter, an additional 2.5 million mortgage borrowers no longer owe more on their homes than they are worth, according to CoreLogic Inc., CNNMoney reported.
By the end of June, 7.1 million, or 14.5 percent, of mortgage borrowers remained underwater on their loans, compared with 9.6 million, or 19.7 percent, at the end of the first quarter, CoreLogic reported. In late 2009, during the worst of the housing market's meltdown, 26 percent of all borrowers owed more on their mortgages than their properties were worth.
The improvement is mainly due to soaring home prices, which jumped 7 percent during the quarter and more than 12 percent year-over-year, according to the S&P/Case-Shiller national home price index, CNNMoney said. The increases have pushed home equity values high enough to bring many homeowners back into positive territory on their home loans.
Mark Fleming, CoreLogics's chief economist, said the trend could slow as the pace of home price inflation starts to steady.
In Greater Des Moines, 9.8 percent, or 11,000, of all residential properties with a mortgage were in negative equity as of the second quarter, compared with 13.1 percent, or 14,739 properties, in the first quarter, CoreLogic said.