As prices rise, more home owners are regaining equity. But some metros are still facing a disproportionate number of underwater home owners, those who owe more on their home than it is currently worth.

Nationwide, 10.6 percent—or 5.3 million—of all mortgage holders remain underwater. Still, that marks a big improvement from early 2011 when a third of all mortgage holders were underwater, according to data from Lender Processing Services.

Home owners who are underwater struggle to refinance, relocate for a job, and may be tempted to enter foreclosure.

The following metros are seeing the largest number of underwater home owners:

• Rockford, Ill.: 32.3%
• Atlanta: 29.4%
• Las Vegas: 27.3%
• Orlando: 26.6%

Rockford, Ill., which has the highest number of underwater home owners in the country, faces a big foreclosure problem, which is weighing down property values in the area, city officials say. The city—which once attracted Chicago residents with its lower housing prices—now has about 5,400 vacant housing units, 2,000 of which are abandoned or boarded up. Unemployment in the area also is 11.4 percent—down from 15.7 percent in July 2009 but way above the 7.3 percent national rate. While new construction in the area has basically come to a halt, the area’s home prices are starting to edge upward, mostly driven by investors who are buying homes for cash and renting them out.

Source: “Welcome to Rockford, Ill, the Underwater Mortgage Capital of America,” The Wall Street Journal (Sept. 8, 2013