A whopping 23 percent of U.S. homeowners with a mortgage were "underwater" in the first quarter, up from 21 percent in the prior three months, according to research firm Zillow.com.
Homeowners are underwater when their house is worth less than the value of their mortgage.
Repossessions hit a record high in the first quarter, according to Zillow.com, with more than 1,000 homes taken back by lenders in March, Bloomberg reports. Zillow’s data goes back to 2000.
“Having a lot of underwater homeowners will add to the downward pressure on house prices,” Celia Chen, senior director at Moody’s Economy.com, told Bloomberg.
“We do expect that home prices will fall a bit more.”
U.S. home values already decreased 3.8 percent in the first quarter from a year earlier, the 13th straight quarter of year-over-year declines, according to Zillow.
And about 32 percent of homes sold in March turned over for less than their sellers paid for them, Zillow said. Sales of foreclosed properties made up more than 20 percent of March home sales.
The figures bear out the worries of Yale economist Robert Shiller, who is concerned about both the economy and housing.
“The question is whether we have a strong recovery or something like a double dip,” he told CNBC.
“I don’t know if it will be a double dip. But it could be weak performance in the real estate market and in the overall economy.”
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