SACRAMENTO, Calif. – The 12.1 percent of Rhode Islanders who owe more on their mortgage than their homes are worth puts the state below the national average of “underwater” mortgage holders.

Nationally, 7.63 million mortgage holders had negative equity in their homes in August. That represented 18 percent of all mortgages held, according to a report released today by First American CoreLogic, a Sacramento, Calif.-based real estate data collector.

Of the 207,145 mortgages in Rhode Island, 25,015 were higher than the home value. Another 32,889, or 15.9 percent, were “nearing” negative equity, First American CoreLogic reported.

Rhode Island had the 22nd highest rate in the country, the company found. Nevada’s rate was highest, at 47.8 percent of home loans statwide, and Michigan was second, with 38.6 percent.

Both Massachusetts and Connecticut had lower percentages than Rhode Island, the report showed. In Massachusetts, 10.4 percent of mortgage holders owed more than their homes were worth in August, while in Connecticut, 7.4 percent of home loans exceeded equity.

“As long as job losses continue and people face resets on their [adjustable-rate] mortgages, the housing market will be under severe distress,” Sam Khater, a senior economist at First American in Tysons Corner, Va., told Bloomberg News. “We’ve created an entire class of homeowner that is very sensitive to price changes.”

Foreclosures in Rhode Island rose last month to more than double their year-ago level, while U.S. foreclosures rose 20.98 percent compared with a year ago and Massachusetts foreclosures rose 14.06 percent, real estate date company RealtyTrac Inc. said in a separate report. (READ MORE)

The report today followed the release last week of the company’s August 2008 LoanPerformance House Price Index, in which CoreLogic chief economist Mark Fleming wrote that nationwide, “we expect house prices to maintain their steady state or potentially begin to further accelerate downward in light of the economic pressures. No news currently points to an expectation for an improvement in price levels in the near term,” he added.

But National Association of Home Builders’ economists recently predicted that home prices will hit bottom by 2009. New-home incentives, lower prices, falling interest rates, the decline in housing starts and pent-up demand all were cited as factors by analysts at the NAHB semi-annual forecast conference. (To learn more, visit www.nahb.org.)

First American CoreLogic, a member of The First American Corp. group of companies, is a national provider of real estate, property and ownership data. It collects data from 7,569 ZIP codes in the 50 states and District of Columbia. For more information, visit www.CoreLogic.com.