Nevada ties for No. 1 in underwater homes

Nevada’s dramatic drops in negative home equity slowed in the third quarter.

California research firm RealtyTrac reported Wednesday that 31 percent of Nevadans with mortgages had loans that were “seriously” higher than their home values in the quarter that ended Sept. 30.

That was down from 46 percent a year ago but barely a decline from the second quarter’s 32 percent.

Still, the number of Nevadans who owe at least 25 percent more than their home is worth showed continued improvement, falling well below the 62 percent peak reported in the first quarter of 2012.

The number of Las Vegas homes seriously underwater was 34 percent in the third quarter. That tied with Lakeland, Fla., for No. 1 among cities with 500,000 or more residents.

Nevada also topped the nation for serious negative equity in the quarter. Florida was No. 2, at 28 percent. Illinois ranked No. 3, at 26 percent. Michigan and Rhode Island rounded out the top five.

Home equity has broad economic implications. When home values rise, many homeowners feel wealthier, and that can encourage consumer spending.

Home equity has risen considerably in Nevada in recent years, as values leapt year to year by double-digit percentages from late 2012 through early 2014.

But those value gains have slowed in recent months, and that means “a long road back to positive equity” for homeowners still underwater, said Daren Blomquist, vice president of RealtyTrac.

In all, 241,433 Nevadans owed more than their homes were worth in the third quarter.

Another 90,835, or 12 percent, were in the “resurfacing equity” stage, owing 10 percent less to 10 percent more than their home’s value.

Nationally, the share of homeowners seriously underwater was 15 percent.

Among all U.S. homeowners, those seriously underwater were most likely to include people who bought or re­financed from 2004 to 2008, own a home worth less than $200,000, live in the Sun Belt or Rust Belt and live in a Democratic congressional district, Blomquist said.

On the flip side, Nevada also had the nation’s lowest share of equity-rich households, or those with homes worth at least 50 percent more than their mortgage. Just 12 percent of Nevadans were equity-rich. That compared with a national rate of 20 percent. Hawaii ranked No. 1, at 35 percent. In California, an important feeder market for new local residents and tourists, 30 percent of households were equity-rich.

Contact Jennifer Robison at jrobison@reviewjournal.com. Follow @J_Robison1 on Twitter.