A national real estate data firm estimates that 6,859 Wichita homes, or 7.4 percent of the homes with outstanding mortgages, were under water in the fourth quarter.
Another 3,946, or 4.3 percent of mortgages, are nearly under water, said the firm, CoreLogic.
Under water means that the house is worth less than the amount left on the mortgage loan.
It's significant, experts say, because the risk for foreclosure is much higher when a homeowner has no equity in a home.
In recent months, the actual foreclosure rate has risen to about 1.5 percent of Wichita-area mortgages.
Nationally, the problem of underwater mortgages is heavily weighted to those states with a collapsing housing bubble, according to CoreLogic. The worst state is Nevada, with 65 percent of mortgages under water, followed by Arizona at 50 percent and Florida at 47 percent. In Kansas, 10.4 percent of homes with outstanding mortgages were under water.
Homes without mortgages are not included in the totals.
Stan Longhofer, director of the Center for Real Estate at Wichita State University, said the Wichita number seems high to him.
"I could see that, although I suspect it's actually less," he said.
He said that because Kansas home sales prices aren't generally public information, CoreLogic must estimate using a formula.
Having a home mortgage go under water in Wichita is harder than in Nevada or Arizona. The most common reason is a buyer who took out a mortgage at one price, then saw the home value plunge, leaving the amount owed on the mortgage higher than the value of the collateral.
Many Americans have continued to live in the homes and make payments, even though they are no longer building equity. But many have not, choosing to walk away from the home and the loan, giving it back to the lender.
However, home prices in Wichita have basically been flat or only slightly lower, Longhofer said.
Because some Wichitans bought in the past few years using the popular 80/20 loans, which amount to taking out an 80 percent first mortgage and a 20 percent second mortgage at the same time, they have no equity at closing. If the value declines even 1 or 2 percent, the mortgage is under water.
But, Longhofer said, the economy is also affecting that.
When homeowners stop paying their mortgage, the amount owed is tacked onto the total, which can push the outstanding debt up over the appraised value of the home.
"But for anybody else who bought in the past 10 years, unless they refinanced at the peak, it's unlikely."