Nearly one in four U.S. homeowners with a mortgage owed more than their homes were worth at the end of 2009, underscoring the challenges facing any sustained recovery in consumer spending and housing. Some 11.3 million households had negative equity at the end of the fourth quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif., up from 10.7 million at the end of the third quarter. Problems are concentrated in the states that have had the biggest home price declines. In Nevada, seven in 10 borrowers were underwater at the end of December, up from 65% three months earlier. Nearly half of all borrowers in Arizona and Florida and one third of borrowers in California owe more than their properties are worth.“Negative equity is a long-term problem for us,” says Mark Fleming, chief economist at First American CoreLogic. “Some of these markets have lost from their peak 50% of their value. How many years at 5% growth would it take to bring it back?”
By Nick Timiraos, Feb. 23, 2010 WSJ

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