Minnesota isn’t Nevada. Or Florida. But if you’re wondering when the housing markets will return to normal here, new data on homeowners who are underwater on their mortgages won’t make you feel good about 2011.
Nearly 16 percent of Minnesota houses with a mortgage are under water, meaning the debt owed on the house is greater than the house’s current value.
More than one in five Minnesota houses with a mortgage is underwater or near underwater, a stat that’s changed little in the past nine months.
The data comes from the research firm CoreLogic. Minnesota’s still better than the U.S. average, although that’s skewed heavily by Nevada and other basket-case states. Our state’s right at the median.
Here’s the CoreLogic data in graphic form, from the Calculated Risk blog (click on the graph for a larger view).
It’s no secret the housing markets have been a mess in the recession. The parlor game is guessing when “normal” returns. The CoreLogic data tell us that many problems remain just below the surface.
This sizable “negative equity” is a problem for the entire market. Being underwater starts many on the road to foreclosure, which creates layers of new problems.
“Negative equity holds millions of borrowers captive in their homes, unable to move or sell their properties,” Mark Fleming, chief economist with CoreLogic, said in a prepared statement. “Until the high level of negative equity begins to recede, the housing and mortgage finance markets will remain very sluggish.”
Here’s the state-by-state breakdown from CoreLogic.