Fully 6.8 million homeowners were underwater on their mortgage in 2011, up from 5.8 million in 2009 and 2.5 million in 2007, according to newly released data from the American Housing Survey. Underwater homeowners are those with an outstanding balance on their mortgage greater than or equal to the value of their home. The percentage of homeowners with a mortgage who are in this financial squeeze climbed to 14 percent in 2011, up from 12 percent in 2007 and 5 percent in 2007.
One reason for the growing number of underwater homeowners is the decline in home value. Between 2007 and 2011, the median value of owned homes fell by 23 percent, after adjusting for inflation. In 2011, median housing value was just $160,000, down from $178,000 in 2007 and $208,000 in 2007 (in 2011 dollars). For all homeowners with a mortgage, the outstanding balance on their mortgage as a percentage of home value grew to a median of 71 percent in 2011, up from 63 percent in 2009 and 54 percent in 2007.
Source: Census Bureau, 2011 American Housing Survey
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