Despite higher prices, Nevada still tops in underwater homes

Despite a big drop in negative equity, Nevada is still tops for its share of homes underwater.

A Thursday report from California research firm RealtyTrac found that 38 percent of homeowners with mortgages in Nevada owed more on their home than the property was worth in December. That was No. 1 in the nation, ahead of Florida, at 34 percent, and Illinois, at 32 percent. The negative-equity rate in Las Vegas outpaced the rest of the state, at 41 percent, the highest rate among major U.S. cities.

During the worst of the housing market, in early 2012, about 70 percent were under water in Nevada.

RealtyTrac vice president Daren Blomquist said the drop in negative equity has come from higher housing prices. The median single-family resale price jumped 24.2 percent year over year in December, according to the Greater Las Vegas Association of Realtors.

Blomquist said homeowners who are still under water could struggle for years to regain their equity, and that could mean those homeowners will opt for foreclosure as a way out.