In mid-2012, about half of homeowners in the Sacramento region with a mortgage couldn't sell a home without taking a hit because they owed more than it was worth.
Two years later, roughly 17 percent of the region's homeowners are "underwater" on their loans, according to the latest figures from market tracking firm Zillow.com.
Home prices have risen about 40 percent across the region in the last two years. Mortgage rates have remained low, allowing some owners to refinance and pay down loans faster.
The trend is evident in the falling number of foreclosures and short sales. In October 2012, about 47 percent of home sales in Sacramento County were short sales or foreclosures, according to the Sacramento Association of Realtors. Last month, that number stood at 12 percent.
Even so, a few parts of town, particularly areas with much poverty, still have a significant proportion of underwater homeowners. This map shows, by ZIP code, the percentage of underwater homeowners in the region.