Number of underwater homeowners continues to decline
Posted on Thursday, April 17, 2014 at 8:53:44 AM
A high number of foreclosed houses, overdue residential financing payments and dropping home prices are signs of a struggling housing market. Thankfully, some of these conditions are becoming less common across the country.
According to RealtyTrac, only 17 percent of all U.S. properties are seriously underwater, a 26 percent decline year-over-year. That represents the lowest level reported in the past two years. However, slower price gains have prevented a speedy recovery, possibly limiting some additional growth.
"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."
In addition, Black Knight Financial Services reported that residential real estate sales have remained strong despite a waning interest in residential financing. This is the case because of increased investor activity and booming cash sales. As an added bonus, there is room to expand mortgage origination activity due to currently tight credit standards, assuming these conditions were to change in the near future.