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.
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.
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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.....
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.
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.
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.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.
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