The home-mortgage crisis in Las Vegas is showing few signs of abatement, as borrowers remain far underwater.
About 68.5 percent of Las Vegas Valley homeowners with mortgages were underwater — meaning their debt exceeds the home’s value — during the second quarter this year. That’s compared with the U.S. rate of 30.9 percent, according to a report Wednesday from Seattle-based research firm Zillow.
Nationwide, Las Vegas had the highest rate of underwater borrowers among the 30 largest markets tracked by Zillow. Pittsburgh had the lowest, at 15.6 percent.
The local rate was down from 71 percent in the first quarter this year, while the national rate dipped from 31.4 percent.
Other hard-hit regions also saw a small drop in their percentage of underwater homeowners. Phoenix, for instance, fell to 51.6 percent in the second quarter from 55.5 percent in the first.
Las Vegas homeowners remain well underwater as other aspects of the real estate market show signs of improvement.
There were 462 recorded new home sales last month, up 46 percent from 316 during the same period last year. Some 543 new home permits were also pulled in July, up 89 percent from 287 permits the year before, according to Home Builders Research.
Dennis Smith, president of the Las Vegas-based research firm, said in a recent report that the market’s housing demand is “being buoyed by cash investors.” He said numerous investors are willing to buy homes and rent them out, and there are international investors who believe Las Vegas housing is “the most affordable in the world.”
Nevertheless, when it comes to borrowers, numerous problems remain. In North Las Vegas alone, 79.2 percent of homeowners are underwater, says Zillow.
In the valley as a whole, 36 percent of underwater homeowners owe more than double their home’s value; nationally, it’s 14.5 percent.