Archive

Posts Tagged ‘negative equity’

More Underwater Homes are Beginning to Float again

September 26th, 2014 Comments off

housing_recovery__globest.com__creditAccording to housingwire.com, the latest CoreLogic report indicates 946,000 properties regained positive equity in the second quarter of 2014, increasing borrower equity year over year by an estimated $1 trillion. The number of homes that remain in negative equity has fallen from 7.2 million, or 14.9 percent of all homes with a residential mortgage, in Q2 2013, to 5.3 million homes, or 10.7 percent in the second quarter 2014, a drop of nearly two million in one year. In dollars, this equates to negative equity declining $432.9 billion in 12 months. The 44 million residential properties with positive equity include nine million, about 19 percent, that have less than 20 percent equity, while 1.3 million have under five percent equity. Anand Nallathambi, president and CEO of CoreLogic, tells MHProNews, “With more and more borrowers regaining equity, we expect homeownership to become an increasingly attractive option for many who have remained on the sidelines in the aftermath of the great recession. This should provide more opportunities for people to sell their homes, purchase a different home or refinance an existing mortgage.” ##

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More Underwater Homes Return to Buoyancy in Q1 2014

June 5th, 2014 Comments off

CoreLogic reports 312,000 more homes returned to positive equity in the first quarter of 2014, indicating 6.3 million homes remained underwater as of Q1 2014, compared to 6.6 million homes at the end of Q4, 2013, according to worldpropertychannel.com. In aggregate, the value of negative equity totaled $383.7 billion as of March 31, 2014 versus $400 billion at the end of the fourth quarter, 2013, as MHProNews has learned. Anand Nallathambi, president and CEO of CoreLogic, says, “Prices continue to rise across most of the country and significantly fewer borrowers are underwater today compared to last year. An additional rise in home prices of 5 percent, which we are projecting will occur over the next 12 months, will lift another 1.2 million properties out of the negative equity trap.” ##

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More Underwater Property Owners Breathing Air

April 18th, 2014 Comments off

In the first quarter of 2014 9.1 million U. S. residential properties representing 17 percent of all properties with mortgages were seriously underwater—defined as the loan amount 25 percent higher than the market value–down from 26 percent one year ago, and a drop from 9.3 million residential mortgages representing 19 percent of all properties with mortgages n Q4 2013. As worldpropertychannel.com reports on the data compiled by RealtyTrac, two years ago 12.8 million properties with mortgages represented 29 percent of all residential mortgaged properties, as MHProNews.com has learned. “U.S. homeowners are continuing to recover equity lost during the Great Recession, but the pace of that recovering equity slowed in the first quarter, corresponding to slowing home price appreciation,” said Daren Blomquist, vice president at RealtyTrac. “Slower price appreciation means the 9 million homeowners seriously underwater could still have a long road back to positive equity.”

“The relatively high percentage of foreclosures with equity is surprising to many because it would seem homeowners with equity could easily avoid foreclosure by leveraging that equity by refinancing or with an equity sale of the home,” Blomquist noted. “But many distressed homeowners with equity may not realize they have equity and in some cases have vacated the property already, assuming that foreclosure is inevitable.”##

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Underwater Mortgages Gradually Decrease

January 9th, 2014 Comments off

Increasingly, more mortgage borrowers are rising to the water’s surface instead of being underwater. According to RealtyTrac, 19 percent of all homes with mortgages were “deeply underwater,” meaning they owed at least 25 percent more on their mortgages than their homes are worth in December, a total of 9.3 million properties. That’s a drop from the 10.9 million properties in the same position last January, accounting for 26 percent of all homes with mortgages. The increase of nearly 14 percent in home prices year-over-year through October has added thousands of dollars to the average value of a U. S. Home, as CNNMoney informs MHProNews. However, Daren Blomquist of RealtyTrac says the danger still has not ended for many people. “There are still millions of homeowners who are in such a deep hole that it will take years for them to regain their equity. The longer these homeowners remain in a negative equity position, the more likely that foreclosure will become the path of least resistance for them,” he noted. The states with the highest percentages of “deeply underwater” homes include Nevada (38%), Florida (34%), Illinois (32%) and Michigan (31%).

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More Homes Lifted out of Negative Equity in Q3

December 18th, 2013 Comments off

During Q3 2013 an additional 791,000 U. S. homes returned to positive equity as home values continue to rise, bringing the number of mortgaged residential properties with equity to 42.6 million. The number of homes remaining in negative equity fell from 7.2 million at the end of the second quarter to 6.4 million at the end of the third quarter 2013, accounting for
13 percent of all homes mortgaged. “Rising home prices continued to help homeowners regain their lost equity in the third quarter of 2013,” said Mark Fleming, chief economist for CoreLogic. “Fewer than 7 million homeowners are underwater, with a total mortgage debt of $1.6 trillion. Negative equity will decline even further in the coming quarters as the housing market continues to improve.” As worldpropertychannel.com informs MHProNews, ten million of the homes in the positive equity column have under 20 percent equity and may have a difficult time finding new financing.

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Slowing Home Appreciation Means Positive Equity Distant for Underwater Borrowers

November 23rd, 2013 Comments off

According to the analytic firm Zillow, 10.8 million homeowners still owe more than their house is worth, a drop of over 4.9 million from the high point of Q1 2012, which represents a 21 percent decline when the negative equity peak was 31.4 percent of all homeowners. In Q2 2013 the negative equity rate hit 23.8 percent, representing the largest quarter-over-quarter drop since Zillow began following the trail of negative equity in Q2 2011, according to nationalmortgagenews. Stan Humphries, the firm’s chief economist, says, “Rising home prices and a greater willingness among lenders to engage in short sales have both contributed substantially to the significant decline in negative equity this quarter (Q3 2013). We should feel good that we’re moving in the right direction and at a fast clip.” If home price values fall in 2014 as predicted by Zillow and others, the pace of negative equity improvement will slow, falling to only 18.8 percent. As MHProNews has learned, home values that increase by Zillow’s prediction of 3.8 percent next year would require a homeowner underwater by 20 percent five years to reach positive equity. Humphries says, “Negative equity must be considered part of the new normal in the housing market.”

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Home Values Spike, especially out West

September 23rd, 2013 Comments off

Of the 30 largest metropolitan areas that the Zillow Real Estate Market report analyzes, 20 experienced annual home value increases of at least ten percent in August, the most significant of which were in California cities—Sacramento rose 34.1 percent—plus Las Vegas and Phoenix. Overall, 85 percent of the 382 markets analyzed by the report saw home prices increase 6.6 percent annually, the largest gain since July 2006 when values rose 7.6 percent. As Stan Humphries, chief economist for Zillow tells nationalmortgagenews, “Double-digit appreciation does help to lift homeowners out of negative equity, and to entice sellers into a low-inventory environment,” but this pace cannot be safely maintained. MHProNews has learned during the coming 12 months Zillow says home values will increase another 5.2 percent to $170,500.

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Falling Inventory (and not much else) is Driving Prices

February 6th, 2013 Comments off

In describing the housing market as in “pre-covery” instead of “recovery”, the only factor that has really changed in the housing market is falling inventory, according to Jonathan Miller, writing on the millersamuelblog. He says falling inventory is the result of sellers becoming buyers (or renters), but with 40 percent of mortgage holders having low or negative equity, they don’t qualify to trade up because credit is tight, so they wait and hope the market will improve. Unemployment has fallen very little, personal income is basically flat, low interest rates are keeping demand constant, and as MHProNews understands, tight credit continues to hold back supply which causes prices to rise.

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Underwater Loans Fall

August 24th, 2012 Comments off

nationalmortgagenews tells MHProNews research firm Zillow says in its “Negative Equity Report” 400,000 fewer mortgages fell into underwater loan status in the second quarter 2012 compared to the first quarter, dropping from 15.7 million to 15.3 million Americans. Percentage-wise, the numbers dropped from 31.4% of all homeowners with balances higher than the value of their property to 31%. Stan Humphries, Zillow’s chief economist, said rising home values caused by tightening inventories was the main cause for the drop. By age group, underwater borrowers between 20 and 24 are more likely to be current on their loans, with 5.9% being 90 or more days past due as compared to 9.2% of all underwater homeowners.

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Low Inventory of For Sale Homes Raises Prices

July 30th, 2012 Comments off

azstar reports home sellers are benefiting from the reduced inventory of homes for sale. The drastic drop in availability has reached 50 percent in some areas of California since last year, and has dropped 53 percent in San Diego since last summer. Los Angeles has seen a decrease of 49 percent since a year ago, and Seattle is down 41 percent. Realtor reports of 146 large markets, 144 had a lower inventory of homes last month than a year ago. Analysts suspect the reason is homeowners with negative equity see prices finally starting to slowly rise, and not wanting to take a big hit, they have decided to wait until prices come back up. MHProNews has learned banks with foreclosed properties are doing the same thing.

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