From The Atlantic:
Nearly five years after the market came crashing down, America’s housing market is beginning to show signs of recovery. Sales of previously-occupied homes have been tracking upward, as have prices.
And according to data released today by the by real-estate website Zillow, the share of homeowners who are “underwater” is also starting to slowly improve. The Zillow data tracks the percent of homeowners with negative equity — that is, those who owe more than their homes are worth — and the dollar amount of that negative equity for the United States as a whole and for its metro regions.
While the amount of negative equity declined by $42 billion in the second quarter this year, it remained a whopping $1.15 trillion. Of all homeowners, 15.3 million (30.9 percent) remained underwater in the second quarter, though this was down from 15.7 million homeowners or 31.4 percent in the first quarter.
But the trend remains incredibly uneven across the United States. In more than half of U.S. metros (179 in all), 25 percent or more or homeowners remain underwater. And, there are 22 metros, 6.5 percent of them, where more than half of all homeowners are underwater. Fernley,Nevada has the highest rate of underwater homeowners in the country with 69.7 percent, and Huntingdon, Pennsylvania has the lowest, 4.7 percent….
The share of underwater homes across metros is associated with several key economic and demographic factors, but the two factors that appear to have played the biggest role are unemployment and the amount of income devoted to housing.