Rate of negative equity falls to 28.2%

Rising prices are bringing more homeowners above water on their mortgages, but the rate of negative equity remains above 40% in a number of cities.

By Teresa at MSN Real Estate Nov 16, 2012 12:44PM

House in stormy water (© Steven Puetzer/Getty Images)As home values rise, the number of borrowers who owe more than their home is worth is falling. The latest analysis by Zillow finds that 28.2% of U.S. homeowners with a mortgage are underwater, down from 30.9% last quarter.

 

But many of the areas hardest hit by the real-estate crisis still have a large percentage of underwater borrowers, and many still owe significantly more than their home is worth. That in itself is bringing prices up as homeowners remain trapped in homes they can’t sell, meaning fewer homes go on the market.

 

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"The fall in negative equity rates means homeowners have additional options for refinancing or selling their homes," Zillow chief economist Stan Humphries said in a news release. "But while we’re moving in the right direction, a substantial number of homes are still locked up in negative equity, unable to enter the existing resale market despite the desires of their owner."

 

About one-third of homeowners do not have mortgages. Of all homeowners, about 20% are underwater. Among underwater homeowners, 90.3% are current on their payments.

Using Zillow’s figures, home values rose 1.3% from the second quarter to the third quarter, the biggest quarterly gain since 2006. But for those who owe substantially more than their home is worth, that wasn’t enough to bring them anywhere near break-even.

 

The average amount of negative equity nationwide is $73,163; the average homeowner with a mortgage is on the hook for 142.5% of the home’s value.

In Las Vegas, 63% of homeowners with a mortgage remain underwater, and 21% of borrowers owe twice what their home is worth. In Atlanta, 50.4% of mortgage holders owe more than their home is worth, and 10.4% owe double their home’s value. The rate of negative equity also is above 40% among homeowners with mortgages in Miami-Fort Lauderdale, Tampa and Orlando, Fla.; Riverside and Sacramento, Calif.; Phoenix; and Detroit. You can see how your area fared in this interactive map.

Some of those hard-hit cities experienced the greatest decline in negative equity between the second quarter and the third quarter. The largest declines came in Phoenix, at 6.2 percentage points; Las Vegas, 5.5; Denver, 4.9; Sacramento, 4.6; and Orlando, 4.2.

 

Younger borrowers are most likely to be underwater. Among borrowers under 40, 43.9% are underwater.

 
28Comments
Nov 24, 2012 5:05PM
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obama helps nobody. like reagan said. good  intensions bad  ideas
Nov 24, 2012 4:58PM
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B/O dont care if your house is underwater because his house is paid for until 2016

Nov 24, 2012 3:26PM
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That such GREAT NEWS!!! only one in every four mortgages is crap! I feel so much better.....
F 'in B.S. that banks were bailed out, the Auto industry was bailed out, The "Solar energy folks" were given tons of $$ only to go bankrupt immediately, Yes Sir in Deed, This is Fabulous news, Now I just need MY UNDERWATER MORTGAGE TO GO AWAY.....
Congress.......Hello..........Mr. President??? Anybody out there????
Just as I expected.......
The Rich are richer and poor are poorer.....oh an the crooks keep getting into office.....

Nov 24, 2012 2:30PM
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  i sorry for your mother i guess we  all on are own now

  god bless you people

Nov 24, 2012 2:08PM
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This is all a lie. My moms house has lost more then half its value, she owes twice as much a she arigally paid for it and the mortgage company will not help her since they said they never took money from the government  to help people they don't have to do what the government says
Nov 24, 2012 12:10PM
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Most folks have already lost their homes and those homes resold at way below value.  This article is  a crock. 

 

My home in Nevada is worth 35% less than I paid for it in 1997.  Nothing good happening in Nevada with home values going up.

Nov 24, 2012 11:32AM
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Don't be fooled by Bankers and Realtors...The only people buying houses have been Hedge Funds for rentals but that will change because they now realize it costs too much to manage these properties.

 

 

House prices do not match current fundamentals....Don't buy a house right now and lose your shirt.

Nov 24, 2012 10:45AM
Nov 24, 2012 9:53AM
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This is a lie in my opinion. Bought and paid for ad. But come January it will be a whole different scene. As soon as Obammy is inaugerated, the foreclosures that have been stockpiled will be released. The prez ordered the banks to withhold all new foreclosures until then.
Nov 24, 2012 9:49AM
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Um, well yeah.  More for closures and short sales equals fewer houses underwater.  This is only a minor indicator of the housing market.
Nov 24, 2012 9:13AM
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What difference does it make,you have to live in a home if you were comfortable with the price when you bought it. Most of us did not buy the home to resale anyway.

I do wonder though when the market went up and everyone made money that was ok but now its went down they ask for help from the government and most are getting it,when it goes back up will those who got help give that back...I doubt it.

I bought my first home with hard earned cash maybe people should try that today instead of spending everything they have on cars fancy phones trips and most things us older folks worked a lifetime for,cause most of these things there buying is on credit. sorry I do not feel sorry for them.

Nov 24, 2012 9:00AM
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Just because homeowners are not underwater it doesn't mean the real estate market is rosy.  Does your home have the same value as it did in 2008?  I purchased my home in 2007 and I can only sell for about 87% of my purchase price and that is before real estate commissions and other costs of selling.
Nov 24, 2012 6:32AM
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...maybe that's because the majority no longer have house???  Next thing people lose will be their automobiles.  Whoever reports these numbers need to understand what happened three years ago when they were in high school.
Nov 24, 2012 6:32AM
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Just got my tax statement the other day. For the 1st time in 5 years the value of my home has risen instead of fallen. It was never underwater but it would have been if it had dropped again this year.
Nov 24, 2012 5:57AM
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 The housing markets seem to be slowly improving but who are the buyers and sellers in the market? It seems like there has been an influx of outside the country dollars, soaking up some prime real estate on the eastern seaboard. The plague for a real recovery in the housing markets continue to be directly linked to the high unemployment numbers and the Federal Governments abilities to reduce uncertainty with our current tax and spend policies. We still have a hill to climb before happy days are here again in the housing markets.

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