As home prices have been rising, the number of underwater homeowners has dropped below ten million for the first time in more than three years. An underwater home is one in which the homeowner owes more on their mortgage then the home is actually worth.
9.7 million, roughly 19.8%, of homeowners were underwater in March of this year. That number is down from 12.1 million at the end of 2011. The negative equity in the United States has decreased from $631 billion in December to $580 billion in March.
Home prices have risen 12.1% from April 2012, this increase has lifted 1.7 borrowers above water. If prices continue to increase, it is likely that more homes will be placed on the market for sale. This is also helping to bolster the economy.
Chief economist of Moody’s Analytics stated, “We still have a long way to go … but we are making quick progress.” States, which housing markets fell the hardest during the housing bubble burst still have the greatest number of underwater homeowners.
In March, the five states with the highest percentage of underwater, mortgaged properties were Nevada at 45.4%, Florida at 38.1%, and Michigan, Arizona and Georgia, all with numbers over 30%.
If you are looking to purchase or sell real estate, feel free to contact Pulgini & Norton, LLP at (781) 843-2200 or (888) 344-2046, or email us with any questions you may have. Our attorneys offer nearly 40 years of combined legal experience and provide thorough, timely, and results-driven service in many aspects of both residential and commercial real estate.
Rising home prices rescue underwater homeowners, USA Today, June 12, 2013