Negative equity rate continues recent decline, fewer homeowners underwater
Posted on Friday, February 28, 2014 at 8:26:56 AM
Challenging economic conditions over the past few years have created serious problems for homeowners with residential financing, including an excess of debt. Now, it appears that there is a smaller number of people currently owing more on their mortgages than their homes are worth.
According to Zillow, the national negative equity rate hit its lowest point in years, ending 2013 at 19.4 percent of all homeowners with a mortgage. While more than 9.8 million residents are still underwater, that figure has been slipping for seven consecutive quarters.
One of the main reasons for the positive change has been rising home prices, which increased 6.6 percent throughout all of 2013, Zillow reported.
In addition, CoreLogic noted that the number of completed foreclosures has declined 19 percent year-over-year in January, with a total of only 48,000 during that month.
"We are recovering, but we're not there yet," said Mark Fleming, chief economist at CoreLogic. "For every completed foreclosure, there are 954 mortgaged homes in non-judicial foreclosure states and 896 mortgaged homes in judicial foreclosure states. Although this is a big improvement relative to the height of the foreclosure crisis, a healthier ratio would be one for every 2000."
Overall, these two trends are good news for homeowners with residential financing. More people are able to make their monthly payments, thanks in part to stable economic conditions and a stronger housing market.