Underwater Homeowners Fall To Record Low

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The number of homeowners who are underwater on their mortgage – where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value – has fallen to its lowest level since RealtyTrac began reporting negative equity during the first quarter of 2012. The numbers, released as part of RealtyTrac’s U.S. Home Equity & Underwater Report for the third quarter of 2014, found that just 15 percent of all properties with a mortgage were seriously underwater. That’s an improvement from 23 percent at this time last year and 29 percent at its peak during the second quarter of 2012. Daren Blomquist, vice president at RealtyTrac, said the decrease in underwater properties is promising but the flood waters are not receding as quickly as they were before, due to slower home price appreciation. In other words, the faster home prices rise, the quicker underwater homeowners return to positive equity. Still, the improvement has nearly cut the number of seriously underwater borrowers in half since its 2012 peak and is a good sign for the housing market’s future health. More here.

Underwater

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