The percentage of seriously underwater homes in the Charlotte metropolitan area dropped to 12 percent in the first quarter thanks to rising prices that helped properties regain equity, according to a report released Thursday.
But a deceleration in price gains nationwide is slowing the equity recovery for millions of U.S. homeowners, according to Irvine, Calif.-based RealtyTrac, which released the report.
The Charlotte region has recently posted steady quarterly declines in the percentage of homeowners with a mortgage who are seriously underwater – defined by RealtyTrac as those who owe 25 percent or more on their properties than thehomes are worth.
In the first quarter, 48,624 Charlotte-area properties were seriously underwater, out of 408,189 with a mortgage.
In the fourth quarter of last year, 13 percent of properties in the region were seriously underwater, down from 17 percent in the third and second quarters of last year. RealtyTrac said first-quarter 2013 data were not available.
Many homeowners in the Charlotte region and elsewhere remain in negative equity since home prices slumped during the housing downturn.
Home prices in Charlotte are 13 percent below the peak levels hit in August 2007, and prices nationwide are 24 percent below their peak, said RealtyTrac Vice President Daren Blomquist.
“The closer the median prices and values get to that peak, the fewer of them that will be underwater. And Charlotte is further along that path than the nation as a whole,” he said.
Nationwide, 17 percent of all properties with a mortgage were seriously underwater in the first quarter, down from 26 percent a year ago.
But an expected slowdown in appreciation nationwide after large price gains last year could mean a longer wait for many homeowners to return to positive equity, Blomquist said. In the first quarter, 9.1 million U.S. residential properties were seriously underwater.
“As we see a slowdown, I think you could see potentially more of those homeowners give up and walk away if they’re not recovering their equity as quickly,” he said.