On average, those who own homes in cities as opposed to those who own in the suburbs continue to be more likely to be underwater on their mortgages. According to real estate researcher Zillow, fourteen percent of homeowners in urban areas owed more on their mortgages than their homes were worth during the second quarter.
That compares to an eleven percent proportion in suburban communities. The fact that so many people remain underwater on their mortgages is perhaps surprising given that the nation is now in its eighth year of economic recovery, but this is a reflection of two things.
First, the housing market downturn was extraordinarily severe, and recovery is not year complete. Second, even though home prices are now just two percent away from their prior peak as reported in the Wall Street Journal, much of that recovery has been concentrated in markets associated with rapid job growth like San Francisco and Denver.
In Detroit, nearly a quarter of urban homeowners are underwater in their mortgages compared with twelve percent in the Detroit suburbs. In Cleveland, twenty seven percent of urban homeowners ow more than the value of their homes compared with fourteen percent in the suburbs.
