The number of U.S. mortgages that were underwater continued to improve in the fourth quarter, although there are still millions of properties in the category, according to RealtyTrac.
Seriously underwater homes represented 11.5% of all properties with a mortgage, as of Dec. 31, according to RealtyTrac’s U.S. Home Equity & Underwater Report. That was down from 12.7% of all properties at the end of the third quarter.
The total number of seriously underwater homes at the end of the fourth quarter was about 6.4 million.
While progress is being made, it will take more time to clear out the inventory of underwater homes, Daren Blomquist, vice president at RealtyTrac, said in a news release.
“It will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” Blomquist said.
The number of seriously underwater homes that were in a state of foreclosure declined to 28.4% of all homes, as of the end of the fourth quarter, compared to 33.4% at the end of the third quarter.
RealtyTrac defines seriously underwater as a home where the combined loan amount secured by the property is at least 25% higher than the property’s estimated market value.