The number of U.S. home owners that have mortgage debts that are higher than the actual value of the property, has reached approximately 33 percent, according to online real estate service, Zillow.com
As of March 31, about 21.8 percent of all owners – houses with mortgages and without – owed more than what the houses were initially valued at.
Property values dropped 14 percent from last year in the first quarter, reducing the median value of U.S. single- family homes, condominiums and cooperatives to $182,378, Zillow said.
The decline has left about 20.4 million of the country’s 93 million houses, condos and co-ops with loans higher than what the properties are worth. The gain in underwater homeowners will lead to more bank repossessions, Zillow said.
Many owners “would be more willing to bear the financial consequences of bankruptcy or foreclosure,” Stan Humphries, Zillow’s vice president of data and analytics, told Bloomberg.
“You are going to continue to see home prices fall for the rest of this year and some portion of next year.”