Rate of 'underwater' homeowners falls to 15% in Dallas area

Fewer Dallas-area homeowners are underwater with their mortgages, the latest figures show.

Just under 15 percent of Dallas-area homeowners with a mortgage owed more than their property was worth at the end of the first quarter, researchers at CoreLogic reported Monday. That works out to about 110,000 homes.

That's a big improvement from mid-2009, when an estimated 30 percent of Dallas-area mortgage holders were upside down.

Nationally, the number of home borrowers who had negative equity declined slightly in the first three months of 2010, the California housing and mortgage research firm said. But CoreLogic estimates that almost a quarter of Americans still couldn't pay off their mortgages if they sold their homes today.

"As house prices grow again and borrowers pay down their mortgage debt, negative equity levels will begin to diminish," Mark Fleming, chief economist for CoreLogic, said in the report. "The typical underwater borrower is likely to regain their lost equity over the next five to seven years."

North Texas median home prices have risen about 5 percent so far in 2010, according to data from real estate agents' Multiple Listing Services.

Texas never suffered double-digit home price declines in the recession, which have put borrowers in many other markets underwater. In Nevada, 70 percent of home mortgage holders are underwater. And 51 percent in Arizona and 48 percent in Florida are upside down.

Homeowners who owe more than their property is worth are more likely to default and let the house go into foreclosure.

Source "Dallas Morning News" Steve Brown