At first it doesn't sound that great: 1 in 3 people who have mortgages still owe at least 25% more on their house than it's actually worth.
But a year ago, it was even worse. At that time, more than half of all Michiganders with mortgages were in that position.
So it looks like things are going in the right direction, according to Daren Bloomquist of Realty Trac.
"The more people who are not underwater, they might decide that, 'o.k., now I actually can sell my property and make money off of it,'" he says.
"So more people listing their homes for sale...will help stimulate the housing market in Michigan."
This is all because the housing market keeps warming up, and people's homes are worth more money.
So even if you were never underwater on your home, you might feel richer, says Bloomquist.
"If you have a home that's worth now $100,000, and last year it was worth $70,000, that gives you a lot of confidence. And maybe you decide, now I can do some remodeling on my home, maybe I'll do a $5,000 project to fix up my kitchen," he says.
Still, Michigan is one of states with the highest rate of people seriously underwater on their homes: 29% of residential properties.
That puts us behind only Nevada, Florida, and Illinois. Ohio is in 5th place.
