Nearly 16 million homeowners – not quite a third of people with mortgages – owe more on their home loans than their properties are worth, according to real estate site Zillow.
Of all homeowners in the U.S., 31.4% were underwater in the first three months of the year, up slightly from 31.1% in the fourth quarter of 2011.
For many, the situation was caused by a slump in their home values; for others, it was an increase in mortgage debt. High unemployment and economic instability could fuel more delinquencies and foreclosures.
But for many in the overturned boat, negative equity is what Zillow chief economist Stan Humphries calls a “paper loss.”
“As home values slowly increase and these homeowners continue to pay down their principal, they will surface again,” he said in a statement.