The local housing market has been in recovery for a few years, but a new report found Arizona and metro Phoenix still have among the highest underwater rates in the nation.

Being underwater, or having negative equity, is when a homeowner owes more on their mortgage than what their home is currently worth.

When home values plunged during the housing crash, millions of homeowners across the nation found themselves in that situation, which is why so many were either stuck in their homes or had to give them back to the bank.

While there’s been a lot of progress since then, Arizona and the Valley still are struggling by comparison.

According to a report released by CoreLogic this week, Arizona and metro Phoenix had the third- and second-highest underwater rates, respectively, in the nation during the fourth quarter.

CoreLogic defines the negative equity rate as the portion of all homes with an outstanding mortgage that are underwater.

Frank Nothaft, CoreLogic’s chief economist, said that’s largely because of how incredibly hard Valley home prices fell during the housing crash. He said some neighborhoods saw values nosedive by as much as 70 percent.

“That was a big hole to dig out from under,” he said.

He said the nation’s negative equity rate peaked at 25 percent, while Arizona’s rate peaked at 53.7 percent and Phoenix’s at 60 percent in 2009.

By the end of last year, the national rate had dropped to 10.8 percent, and Arizona and Phoenix each stood at around 19 percent.

“That’s a far cry from 60 percent, so there has been a great deal of progress,” Nothaft said. “There’s still a long way to go.”

More than 480,000 Arizona homeowners have been freed from negative equity since the 2009 underwater peak, according to CoreLogic, thanks to the double-digit home price increases that took place in the early stages of recovery, starting in late 2011.  

But over the past year or so, home price appreciation has slowed down substantially by comparison, and housing experts anticipate that trend will continue through 2015.

Thus, for roughly 173,000 Valley homeowners, Nothaft said freedom from negative equity will likely come a bit more slowly.