The Wall Street Journal says the number of borrowers currently underwater on their mortgage (meaning they owe more than the property is worth) has swelled to 23%. Ouch.

On the bright side, there are still more homeowners who don’t even have a mortgage then there are ones who are seriously underwater. Still, areas with many underwater mortgages will face a long, hard road to recovery — as those properties are much more likely to fall into foreclosure, further diluting a market already saturated with bank owned real estate.

Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home’s value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American.

Most U.S. homeowners still have some equity, and nearly 24 million owner-occupied homes don’t have any mortgage, according to the Census Bureau.

One in Four Borrowers Is Underwater [WSJ]

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