5 Worst States for Homeowners

Ever since the 2008 market crash, homeowners have suffered through sharp downturns in both property value and purchasing rates. CoreLogic’s 2011 Q4 home equity report paints an especially grim picture of the U.S. housing market.

The United States is now experiencing astronomical rates of negative equity, with a record number of mortgages underwater. As of May 2011, 28% of U.S. homes were worth less than their mortgage.

To get the lay of this land of foreclosures and debt, let’s look at the five worst states for U.S. homeowners based on the percent of mortgages currently underwater. 

#5: Georgia (33%)

The Deep South entry on this list, Georgia has been hit especially hard by recession job loss and economic flight.

Georgia is home to 1.64 million mortgages, 541,178 of which have negative equity — with another 113,203 homes maintaining near-negative equity. Georgia’s collective loan-to-value ratio is 82.5%, and net homeowner equity is worth about $53.8 billion as of the close of 2011.

#4: Michigan (34.7%)

The state’s crumbling industry — and Detroit’s unfortunate status as America’s worst-decaying city — have blindsided Michigan’s housing market.

Michigan’s homeowners are sitting on 1.38 million mortgages, a total 480,000 of which are underwater. Another 72,582 have near-negative equity. Michigan’s loan-to-value ratio stands at 83%, and the state’s net homeowner equity is a mere $32.6 billion.

#3: Florida (44.2%)

While the Sunshine State has long been a go-to destination for vacation property, its housing market is sinking under the weight of a disproportionately high rate of negative equity.

With 4.33 million mortgages, a total of 1.916 million are underwater. However, a relatively low rate of about 176,000 stand in near-negative equity. Florida’s loan-to-value ratio is 87.2%, with net homeowner equity currently at $104 billion.

#2: Arizona (48.3%)

Ranked 39th nationally by per capita income, Arizona is one of two “sand states” sinking under the weight of negative equity — with nearly half of its mortgages underwater.

Arizona is home to 1.3 million mortgages, 631,126 of which have negative equity while another 62,058 maintain near-negative equity. Arizona’s collective homeowner equity stands at $16.8 billion, and its loan-to-value ratio is currently 93.1%.

#1: Nevada (61.1%)

The entry on this list with by far the highest proportion of underwater mortgages, Nevada also leads the nation in unemployment — with 13.4% of its citizens out of work as of August 2011.

The state currently has 561,341 mortgages, of which 343,256 have negative equity. Another 25,063 have near-negative equity. Nevada’s loan-to-value ratio stands at 113.8%, and net homeowner equity is negative $13.4 billion.