Homeowners struggling with negative home equity

Homeowners who say their houses are worth more than what they still owe on the mortgage has dropped to its lowest level in nearly two years, according to a poll released Wednesday. 

More than half of those asked, 51 percent, say their home is still worth more than the amount left on their mortgage whereas 35 percent of homeowners say they owe more to the bank that their home is worth, according to a Rasmussen poll. 

Meanwhile, about 15.7 million American homeowners owe more on their mortgages than their homes are worth, also known as being underwater, at the end of 2010, up from 13.9 million in the previous three months, according to a report released Wednesday by Zillow, a Seattle-based company that tracks real estate. 

That amount represents about 27 percent of single-family homes, up from 23.2 percent in the third quarter, the highest number since the first quarter of 2009, Zillow said. 

With foreclosures hitting record levels last year and expecting to increase about 20 percent this year with home prices continuing to decline, homeowners have seen their property values drop, leading to negative equity in many cases. 

The number who say their home is worth more than their mortgage is down six points from January, most likely affected by the trend in dropping prices, and is the lowest result measured since May 2009 when just 49 percent reported their home was worth more, according to Rasmussen. 

In the fourth quarter, the median value for a single-family home was $175,200, down 2.6 percent from the end of September and 5.9 percent from a year earlier, according to Zillow. Values have fallen 27 percent from the peak in June 2006.

The total value of single-family homes fell about $798 billion in the final three months of the year, with values dropping my more than $2 trillion to $22.3 trillion for the year, according to Zillow's report. 

While more than 70 percent of homeowners who make $75,000 or more annually say their home is worth more than the amount they owe on their mortgage, fewer than half of those who earn less reported the same. 

The number of homeowners who say their home is worth more now than when they bought it has plummeted in the past several years, especially since the housing bubble ended in 2006. 

The good news, a majority of homeowners (85%) say say it’s unlikely they will miss or be late on a payment, including 47 percent who say this scenario isn't at all likely.

About 12 percent say it’s likely they’ll either miss or be late on a mortgage payment in the next six months, up from nine percent 9 percent last month but similar to results from last year. 

While the housing market continues to struggle, 26 percent say the government should step in to assist those who are having trouble making their mortgage payments, up six points from last month. Another 60 percent say troubled homeowners should sell their homes and find less expensive ones, a view shared by most Americans since 2007. 

Congressional Republicans are likely to take a closer look at government-backed mortgage lenders Fannie Mae and Freddie Mac. While many Americans have benefited from Fannie and Freddie loans, a majority don't hold positive opinions of the entities because of their reliance on federal funding to keep them operating.