The number of underwater homeowners grew to 11.1 million, or 22.8% of all mortgaged properties, during the fourth quarter, CoreLogic said Thursday.
The real estate data firm said the number of borrowers in negative equity is back to third-quarter 2009 levels, suggesting more homeowners are struggling with loans that are worth more than their properties.
Comparatively, only 10.7 million properties, or 22.1%, of mortgage homes, were in negative equity in the third quarter of 2011.
The number of homes in negative equity edged up in the fourth quarter on falling home prices and a foreclosure pipeline that is pushing down national home values.
"The high level of negative equity and the inability to pay is the double trigger of default, and the reason we have such a significant foreclosure pipeline," said Mark Fleming, chief economist at CoreLogic. "While the economic recovery will reduce the propensity of the inability to pay trigger, negative equity will take an extended period of time to improve, and if there is a hiccup in the economic recovery, it could mean a rise in foreclosures."