Fewer Colorado Springs homeowners are sinking on their mortgages, a national report released by CoreLogic shows.

In the first quarter, 2,800 residential properties with a mortgage in Colorado Springs, or 1.8 percent of area homeowners, were in negative equity, according to California-based housing data firm CoreLogic. That's a big drop from the same period last year, when 4,336 residential properties, or 2,8 percent were in negative equity.

The housing industry term refers to owing more on a mortgage than a property is worth; for homeowners, it's commonly known as being underwater or upside down.

Homeowners fall into negative equity when their property values erode; if they owe more on their property than it's worth, they typically can't qualify to refinance their mortgages or sell homes without bringing cash to the closing table.

The negative equity problem nationwide has improved dramatically since the Great Recession; the percentage of homes underwater had hovered near 25 percent in Colorado Springs several years ago.

But a surge in the demand for homes — due, in part, to a strong economy and historically low mortgage rates — has helped drive up property values. As a result, fewer homeowners are plagued by a negative equity problem.

Local home prices have been rising since late 2014; last month, the median prices of homes reached a record high of $280,000, according the Pikes Peak Association of Realtors.

Tribune Content Agency