Fewer Mortgages 'Underwater' at End of Q3

New York, NY, Dec. 14, 2010 -- The total of "underwater" mortgages fell to 10.8 million at the end of September, down from a peak of 11.3 million at the beginning of the year, according to CoreLogic, a real-estate data firm.

That represents nearly 22.5% of U.S. homeowners with a mortgage.

However, home prices appear to be falling again. Another 5% decline in prices would leave an additional 2.4 million homeowners underwater, according to CoreLogic.

"Negative equity is a primary factor holding back the housing market and broader economy," said Mark Fleming, chief economist with CoreLogic.

"The good news is that negative equity is slowly declining, but the bad news is that price declines are accelerating, which may put a stop to or reverse the recent improvement in negative equity,"