In the second quarter, 10.8 million, or 22.3 percent, of home owners owed more on their mortgage than their house is currently worth, which is down from 11.4 million — or 23.7 percent — in the first quarter, CoreLogic reported Wednesday.
Often, the fear among the industry with underwater home owners is that they will be much more likely to stop making their mortgage payments and walk away from their properties. However, the majority of underwater home owners — 84.9 percent — are up to date on their mortgage payments despite the decrease in the value of their homes, according to CoreLogic.
“The level of negative equity continues to improve with more than 1.3 million households regaining a positive equity position since the beginning of the year,” says Mark Fleming, chief economist for CoreLogic. “Surging home prices this spring and summer, lower levels of inventory, and declining REO-sale shares are all contributing to the nascent housing recovery and declining negative equity.”