18% of mortgage borrowers are underwater

According to Reuters, almost 1 out of 5 mortgage borrowers owe more than their house is worth:

Nearly one in five U.S. mortgage borrowers owe more to lenders than their homes are worth, and the rate may soon approach one in four as housing prices fall and the economy weakens, a report on Friday shows.

About 7.63 million properties, or 18 percent, had negative equity in September, and another 2.1 million will follow if home prices fall another 5 percent, according to a report by First American CoreLogic. ...

Seven hard-hit states—Arizona, California, Florida, Georgia, Michigan, Nevada and Ohio—had 64 percent of all "underwater" borrowers, but just 41 percent of U.S. mortgages. "This is very much a regional problem, and people tend to forget that," said David Wyss, chief economist at Standard & Poor's, who expects home prices nationwide to fall another 10 percent before bottoming late next year.

"Most of the country is not in bad shape," he continued. "Things seem to be stabilizing in Michigan, but the big bubble states—Florida, California, Arizona and Nevada—are still very overpriced."

This statistic, from First American CoreLogic, seems to conflict with data from Moody's Economy.com released a month ago. This report says that 18% of mortgage borrowers are underwater. The statistic from last month said 16% of homeowners were underwater. It is possible that this apparent conflict is really the result of sloppy journalism which assumes that all homeowners have mortgages.

Also, the Rust Belt never really had a housing bubble, so it's good to see that the decline in Michigan is slowing.