House values fell 1.6 percent in the first quarter from the fourth quarter and were off 7.7 percent from a year ago, the “most significant” annual decline in 12 years, driving scores of borrowers to be underwater on their mortgages nationwide, according to Zillow.
Of homeowners nationwide who purchased a home when values peaked in 2006, one out of every two (51.6%) now owes more on their mortgage than their home is currently worth.
For those who purchased in 2005, 42 percent of homeowners are underwater, and of those who purchased last year, 45 percent are currently upside down.
The numbers are even more startling in states such as California and Florida, and in metros like Phoenix and Las Vegas, where some rates of negative equity are as high as 95 percent (Stockton, CA).
This of course can be attributed to ultra-low down payments, negative amortization loans, and double-digit home price depreciation.
One-third of the markets Zillow covered during the first quarter (54 of 160) posted year-over-year home price declines in the double-digits, with most of these markets peaking in 2006 and falling more than 20 percent since then, sapping home equity in the process.
Zillow also noted that the median U.S. home value hasn’t been this low since the second quarter of 2005, with values in metros areas like Boston falling to levels not seen since 2003 and values in Los Angeles sliding back to 2004 levels.
Detroit has fared the worst, with values reverting back to levels not seen since 1998, a 24 percent decline from the fourth quarter of 2005.