Zillow, a Seattle company that operates a real estate website, reported that the Las Vegas area by the end of March carried loans that were $10.2 billion more than the homes were worth. But Zillow predicted that by the first quarter of 2015, no more than 30.3 percent of the metro area’s homeowners would owe more money than their homes are worth.
The percentage of area homeowners carrying negative equity has fallen since peaking in the first quarter of 2012. Still, the 90-day delinquency rate for all mortgaged Las Vegas homes stood at 12.1 percent, which is still above the national average of 7.2 percent.
Zillow reported that among Southern Nevada homes with mortgages, North Las Vegas had the most underwater at 41.3 percent. That was followed by Logandale (36.5 percent underwater), Laughlin (35.8 percent), Las Vegas (33.9 percent), Boulder City (30.1 percent), Henderson (29.4 percent) and Mesquite (23.9 percent).
Some 30 percent of Las Vegas area homeowners who were underwater owed 1 percent to 20 percent more than their homes were worth. An additional 6.8 percent owed 81 percent to 100 percent more than the value of their residences. The remainder of underwater homeowners fell between those extremes.
Zillow also reported that area mortgaged homes that were considered lower tier in terms of value tended to be deeper underwater than top tier residences.
Roughly 9.7 million Americans were underwater in the first quarter of the year, representing 18.8 percent of all mortgaged homes. Zillow predicted that percentage would fall to 17 percent by early next year.
“The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come,” Zillow chief economist Stan Humphries said. “It’s hard to overstate just how much of a drag on the housing market negative equity really is, especially at the lower end of the market, which represents those homes typically most affordable for first-time buyers. Negative equity constrains inventory, which helps drive home values higher, which in turn makes those homes that are available that much less affordable.”