CoreLogic: More homeowners leave negative equity behind
Posted on Tuesday, December 17, 2013 at 9:48:15 AM
Negative equity - or when homeowners owe more on their residential financing than their homes are worth - has become an unfortunate reality of the U.S. housing market.
However, that appears to be changing. According to a recent report provided by CoreLogic, fewer borrowers are dealing with this problem. In total, 791,000 people returned to positive equity during the third quarter of 2013. At the moment, only 13 percent of all homeowners with a mortgage are in negative equity, compared to 17 percent at the end of the second quarter.
"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 those with residential financing see increased stability, they may be more tempted to flip some of that equity back into their properties. According to Bankrate.com, a well-designed kitchen can boost the value of any house, as could nicer appliances, an attractive bathroom and better storage options.
These changes can mean a higher resale value, and many improvement options will provide a strong investment return for homeowners.