Zillow: Fewer homes underwater in second quarter | North Salem Real Estate

Although the percentage of underwater homeowners continues to heal, the remaining pain is left to struggling borrowers of low-price homes, according to an article in The Wall Street Journal:

About 28% of homes with a mortgage within the bottom third of home values were underwater at the end of the second quarter, meaning they were worth less than the balance of their mortgages, according to real-estate information service. That compares with about 16% of homeowners in the middle tier and 9.2% in the top tier.

As a result, the article explained that it could prevent owners from moving up to larger homes and thus put a damper on purchases by first-time homebuyers.

Overall, the percentage of homeowners who were underwater in the second quarter dropped to 17% from 24% a year ago. 

Source: WSJ

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