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Nearly 645K Chicago-area homeowners underwater on mortgages

Published: Thursday, Feb. 21, 2013 9:55 a.m. CDT

(MCT) — Almost 645,000 homeowners in a 14-county Chicago area owed more on their mortgages than their homes were worth at the end of December, a slight increase from the third quarter, Zillow reported Thursday.

Still, the company's fourth quarter report on negative equity showed a year-over-year decrease in the percentage of homeowners with a mortgage who were underwater on their loans. Last year, 41,208 area homes moved into positive equity, Zillow found.

Compared with the nation as a whole, the Chicago area remains hard hit by the housing crisis. Zillow found that nationally, 27.5 percent of homeowners with a mortgage, or about 13.8 million homeowners, had negative equity in December, but that percentage should fall to 25.5 percent by the end of this year.

That positive trend is not the case in the Chicago area, where the percentage of underwater homeowners is expected to increase to 37.3 percent of all homeowners with a mortgage by the fourth quarter. The uptick is due to Zillow's prediction that home values in the Chicago area are expected to fall 0.6 percent this year.

Zillow's definition of the Chicago area includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties in Illinois, Wisconsin's Kenosha County and Indiana's Jasper, Lake, Newton and Porter counties.

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