CoreLogic: Homeowners continue to move above water
Posted on Thursday, March 6, 2014 at 9:26:17 AM
Unfortunately, homeowners struggling to make their mortgage payments as their home equity plummeted became a common sight over the past several years, but, as conditions began to turn around in 2013 and 2014, this image has become less frequent.
Better yet, there is more good news to be had, according to CoreLogic. Throughout all of 2013, 4 million homes returned to positive equity, upping the total number of homes in this steady financial situation to 42.7 million. Negative equity is when homeowners owe more on their residential financing than their homes are worth.
"The plight of the underwater borrower has improved dramatically since negative equity peaked in December 2009 when more than 12 million mortgaged homeowners were underwater," said Mark Fleming, chief economist for CoreLogic. "Over the past four years, more than 5.5 million homeowners have regained equity, reducing their risk of foreclosure and unlocking pent-up supply in the housing market."
In addition, upward mobility may be related to some policy changes made by the Federal Reserve. Recently, John Williams, president and chief executive of the Federal Reserve Bank of San Francisco, pointed to encouraging numbers for auto and home sales, according to Reuters. Lower interest rates for residential financing makes borrowing more favorable, allowing increased activity among this sector.