The States Where Underwater Mortgages Are Sinking Home Values

10. Ohio
> Pct. Homes Underwater: 22%
> Total property Value: $314.3 billion
> Mortgage Debt Outstanding: $237.4 billion
> Median Home Value Drop From Peak: -11.7% (22nd largest decrease)
> May Foreclosure Rate: 1 out of every 608 homes

To date, 14.5% of Ohio residences are vacant. Worse still, more than 21% of mortgages in the state are currently underwater, while another 6.3% are nearly underwater. This is one of the largest portions of homeowners on the brink of negative equity. In Cleveland, the number of bank-owned foreclosed residences, one of the worst problem’s affecting city economies, is expected to peak in July at nearly three quarters of a million homes. Since 2007, the state’s median home price has dropped by nearly 12%. It now has the third-lowest median home value in the U.S. at just $113,730.

9. Virginia
> Pct. Homes Underwater: 23%
> Total Property Value: $414.1 billion
> Mortgage Debt Outstanding: $293.2 billion
> Median Home Value Drop From Peak: -18.3% (14th largest drop)
> May Foreclosure Rate: 1 out of every 766 homes

Twenty three percent of Virginia’s mortgaged homeowners owe more on their property than it is worth. Another 6% are on the verge of being underwater. Virginia’s foreclosure rate in may (1 out of every 766 homes) is better than the national average, but with the third-highest unemployment rate in the country the situation for homeowners could get worse.

8. Maryland
> Pct. Homes Underwater: 24%
> Total Property Value: $419.9 billion
> Mortgage Debt Outstanding: $294.2 billion
> Median Home Value Drop From Peak: -29.3% (6th largest drop)
> May Foreclosure Rate: 1 out of every 1,301 homes

Compared to most of the other states on this list, Maryland’s residents appear to be in good financial shape. The median income is the 2nd highest in the country, and the unemployment rate is the 13th lowest. The foreclosure rate, 1 out of every 1,301 homes, was one of the lowest in the country in May. However, nearly one in every four Maryland homes is underwater. The city of Baltimore, where some of the worst effects of the housing crisis were felt, is offering a $10,000 incentive for people to buy and renovate the city’s many vacant homes.

7. Idaho
> Pct. Homes Underwater: 24%
> Total Property Value: $48.4 billion
> Mortgage Debt Outstanding: $35.1 billion
> Median Home Value Drop From Peak: -20.8% (9th largest drop)
> May Foreclosure Rate: 1 out of every 460 homes

Like Maryland, nearly one in every four Idaho homes are underwater, although the state is in a very different situation economically. Idaho has the 22nd lowest median income in the country and 9.4% of the state’s working population is unemployed. The housing crisis clearly had a greater impact on the state, as well. Idaho’s median home value dropped more than 20% from its peak in the third quarter of 2007.

6. Georgia
> Pct. Homes Underwater: 30%
> Total Property Value: $309.7 billion
> Mortgage Debt Outstanding: $250.2 billion
> Median Home Value Drop From Peak: -19.4% (10th largest drop)
> May Foreclosure Rate: 1 out of every 387 homes

The homeowners of Georgia are arguably in the worst shape in the southern U.S. The foreclosure rate in May – one home out of every 357 – was the second highest in the country east of Arizona. Georgia has the 9th highest unemployment rate in the country, the eighth highest vacancy rate, and nearly one out of three mortgaged homes are in a state of negative equity.