More than 22 percent of homeowners in Colorado Springs owe more on their mortgages than their homes are worth.
CoreLogic, a research and analysis firm, released data today revealing that 34,109 homeowners in Colorado Springs are upside down on their mortgages. That’s consistent with national trends, where 22.5 percent of borrowers owed more than the market value of their homes.
That national number showed some small improvement over the first quarter when 22.7 percent of homeowners had negative equity. However the report noted that falling negative equity rates are likely the result of foreclosures, which takes those homeowners who are under water on their mortgages out of the equation.
In addition to the 22.1 percent of Colorado Springs homeowners who have negative equity, another 10.1 percent have near-negative equity, which is less than 5 percent equity.
Nationally, three quarters of the homeowners with negative equity are also paying interest rates higher than the current market rate.
Negative equity impacts the ability for a homeowner to refinance or sell, according the report. And as a result, those areas hardest hit by falling home prices and negative equity have seen greater decreases in sales than those not as severely impacted.
Since the 2005 sales peak, non-distressed sales in zip codes with low negative equity have fallen 61 percent, compared to an 83 percent sales decline in high negative equity zip codes, according to the report.