More N.H. homes ‘underwater,’ report says

The number of “underwater” homes in New Hampshire has risen more than 8 percent over the last year.A home is considered underwater when the amount owed on the mortgage exceeds the value of the property. As of the end of June, nearly one-fifth, or 19 percent, of all the residential mortgaged properties in the state were underwater, an 8.1 percent increase from the same period last year.The report, issued quarterly by analytics and business services firm CoreLogic, found that the Granite State had 41,723 underwater homes in the second quarter 2011, compared with 38,587 in the same quarter of 2010.Over the same period, the percentage of homes that were nearly in negative equity — defined as those whose borrowers had less than 5 percent home equity — declined slightly, from 5.6 percent last June to 5.5 percent this June, or 12,056 properties.Elsewhere in New England, Rhode Island had a rate of 21.5 percent, Massachusetts 15.7 percent and Connecticut 13.1 percent. Figures were not available for Vermont or Maine.While the percentage of underwater homes in New Hampshire is several percentage points below the national average, the state’s rate of negative equity homes has risen over the past year while the country’s rate has dropped.Nationally, 22.5 percent – or 10.9 million residential properties – were in negative equity in the second quarter of 2011, a dip from the 23 percent in the same quarter of the previous year.”High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery,” said Mark Fleming, CoreLogic’s chief economist. “The hardest-hit markets have improved over the last year,primarily as a result of foreclosures, but nationally, the level of mortgage debt remains high relative to home prices.” — KATHLEEN CALLAHAN/NEW HAMPSHIRE BUSINESS REVIEW