Negative equity decreased in the second quarter, and underwater homes concentrated more in urban areas than in the suburbs, the Negative Equity report from Zillow shows.

In the second quarter, negative equity, the point where a homeowner owes more on a home than what it’s worth, decreased to 12.1%. This is down from 12.7% last quarter and 14.4% last year.

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Underwater

(Source: Zillow)

The data in the Zillow Negative Equity Report incorporates mortgage data from TransUnion, a credit and information management company, to calculate various statistics. The report includes negative equity, loan-to-value ratios and delinquency rates. Overall, this report covers more than 870 metros, 2,400 counties, and 23,000 ZIP codes across the nation.

This prediction is slightly higher than the Q2 2016 U.S. Home Equity Report from ATTOM Data Solutions, a source for housing data and the new parent company of RealtyTrac.

The report showed that in the second quarter, 6.6 million properties were seriously underwater, an 11.9% share of total properties at the end of the second quarter. This is down from 12% in the first quarter, and 13.3% last year.

The negative equity rate in urban areas was higher at 13.7% versus the rate in suburban communities.

This trend holds true in a number of large, local markets. In 13 of the nation’s largest metros, the share of urban homeowners who are underwater is within two percentage points of the share of underwater suburban homeowners.

Cleveland and Detroit showed the biggest difference between negative equity rates in urban and suburban neighborhoods, both of which have a double-digit difference between urban and suburban negative equity rates at 13.6 and 10.8 percentage points, respectively.

On the other hand, negative equity is close to equal among urban and suburban areas in the Seattle area, where 7.2% of urban homeowners are underwater, compared to 7.3% of suburban homeowners.

This shows that the location of a home, urban versus suburban, may not matter as much as the local market in determining if a home is underwater, the report states.

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Underwater

(Source: Zillow)

But why are so many homes still underwater, despite rapidly rising home prices? This infographic from RealtyTrac explains five reasons why.

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