(New York, NY) -- One in five homeowners in the U.S. owe more on their mortgage than their homes are worth, and that number is rising.
A report released by First American CoreLogic says more than eight-point-three-million properties had negative equity at the end of 2008.
The study found homeowners in California, Florida and Nevada are under the greatest stress, but there are worrisome ripples appearing in parts of the nation that were, until now, relatively healthy.
Former Fed official Sherrill Shaffer says "the economic slowdown is broadening." She mentioned that as time passes and more Americans lose their jobs, "it will be more difficult to sustain the levels of pricing and home ownership." Nobody in the housing or lending industries sees a turnaround in the near future.
Robert MacIntosh, chief economist at Eaton Vance Management in Boston, expects housing prices to keep falling until "well into" 2010.
At the end of last year, California had 1.9-million borrowers with negative equity, more than any other state.
Florida is following closely with more than 1.25-million.
The figures mean about one third of all borrowers in both states owe more for their homes than they can sell them for.
While the overall number is larger in those states, Nevada actually has the most stressed out housing market with 55-percent of owners showing negative equity and more than a quarter owing more than 125-percent of their homes' value.
The Obama administration has requested banks modify troubled mortgages.
Only Citigroup has gone along with the request so far.
(Copyright 2009 by Newsroom Solutions)