Negative equity rates continued to fall in Q3
Posted on Wednesday, December 9, 2015 at 2:55:20 PM
The amount of homes in negative equity continued to shrink in the third quarter of 2015, but overall levels of negative equity have seen little change, according to Zillow, holding back what could be an even more definitive housing market recovery.
Zillow reported on Dec. 2 that the negative equity rate dropped to 13.4 percent, down from 14.4 percent in the second quarter and from 16.9 percent one year ago. After peaking at 31.4 percent in early 2012, the national negative equity rate has declined - or at the very least stayed flat - for 14 straight quarters.
More encouraging news came from CoreLogic's announcement on Tuesday that foreclosure inventory had fallen by 21.5 percent in October from one year before, while completed foreclosures declined by 27.1 percent in the same time period. Year-over-year, completed foreclosures tumbled from 51,000 in October 2014 to 37,000 in October 2015.
Despite the falling rate and inventory, however, more than 6.5 million homeowners across the country are still underwater on their mortgages. High negative equity rates affect markets by reducing the availability of purchasable homes - owners behind on their residential financing can't put their homes up for sale - and leaving homes on the market for longer periods of time.