A whopping 29 percent of Florida's homeowners owe more on their mortgages than their homes are worth. And 1.4 million others in the state may soon join them if property values keep falling, according to a report from First American CoreLogic, a Santa Ana, Calif.-based company that analyzes loan data for lenders.
Nationwide, more than 7.5 million mortgaged residences, or 18 percent, have negative equity, the report said. An additional 2.1 million mortgages are at risk.
Florida tied with Arizona for the third-highest percentage of properties with negative equity.
Nevada led the list with an estimated 48 percent owing more than their home's value. Michigan was second with 39 percent. California and Georgia rounded off the top five, with 27 percent and 23 percent, respectively.
Together, those six states account for nearly 60 percent of all homeowners nationwide who are "underwater" on their mortgages.
States such as Florida, Nevada, Arizona and California had rapid run-ups in home prices and speculation during the boom and are now seeing deep price drops, the report said.
Some economists worry that more homeowners will lose their homes, or give them up, as home values continue to decline.
Nationally, home prices are already down about 20 percent from their peak in mid-2006. By the time the housing market hits bottom, prices may be down 40 percent from the top, leaving 40 percent of homeowners underwater, according to Nouriel Roubini, economics professor at New York University.
While some underwater borrowers will lose their homes to foreclosure, economists say, many will wait for values to recover.
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