'Underwater' homes decline nationwide, report says

A shortage of houses on the market has pushed up home prices in many markets, including California. But the supply could increase, cooling price increases, if more homeowners escape negative equity positions and regain the option of selling.
“The scourge of negative equity continues to recede across the country,” CoreLogic Chief Executive Anand Nallathambi said in a statement. “With fewer borrowers underwater, the fundamentals underpinning the housing market will continue to strengthen.”
The inability of homeowners to sell and move -- say, for a better job -- also places a drag on the overall economy.
In California, an estimated 1.7 million homes were underwater at year's end, or about a quarter of all homes with a mortgage. The Riverside-San Bernardino-Ontario metropolitan area had 35.7% of its homes with a mortgage in negative equity — the fifth-highest percentage among the country’s largest metropolitan areas.