See also: The Uneven Housing Recovery by Michela Zonta and Sarah Edelman
Seven years after the housing bubble burst and the financial markets collapsed, about 7.5 million American homeowners are still underwater—meaning that the owners’ homes are worth less than what they owe on them. Even though home values have continued to rise and the national percentage of homeowners with negative equity has dropped from 30 percent in the second quarter of 2011 to 15 percent in the first quarter of 2015, much work remains to be done in order for the market to fully recover.
The mortgage crisis has affected the entire nation’s economy. The negative equity crisis, however, has typically been concentrated in certain areas of the country, and its evolution has followed different patterns based on geography.
The following maps show that the negative equity crisis is a dynamic phenomenon that varies in magnitude and impact over time. Even as the nation climbs out of the recession, not all counties are recovering. While the large majority of counties have experienced various degrees of decline in negative equity levels since 2011, nearly 1,000 counties have seen either stagnant or increased percentages of underwater homes—a concerning trend. Even within areas that are improving, many counties continue to experience above average rates of negative equity, which suggests that a complete recovery for all homeowners may still take some time to materialize.
These maps demonstrate that struggling counties tend to be located in nonmetropolitan and rural areas. Counties that are experiencing a recovery or improvements in negative equity rates tend to be located in metropolitan areas where the labor market is improving and the population is growing. In contrast, counties that are experiencing an increase in negative equity rates tend to be located in nonmetropolitan and rural areas—communities that are less likely to be equipped with the resources that could ease these homeowners’ recoveries.
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Michela Zonta is a Senior Policy Analyst for the Housing Finance and Policy team at the Center for American Progress. Sarah Edelman is the Director of Housing Policy at American Progress. Andrew Lomax is the Data Visualization Producer at American Progress.