19 Dec In Most Major Markets, Negative Equity Has Fallen by Half Since Peak of Crisis
The number of U.S. homeowners upside down on their mortgages has fallen by more than 40 percent since early 2012, according to the third quarter Zillow Negative Equity Report.
More than 7 million Americans who at one point owed more on their mortgages than their homes were worth have escaped – either by paying down their mortgage balance, short sale and foreclosure or because their home values improved. Roughly 8.7 million homeowners remain trapped underwater on their mortgages, but the negative equity rate has halved since 2012 in the markets hit hardest by the recession.
“The market has made terrific strides since bottoming out in late 2011 and early 2012, with millions of underwater homeowners freed in just the past few years, and millions more set to surface in coming months and years,” said Zillow Chief Economist Dr. Stan Humphries. “Looking at negative equity helps us understand so many of the currently out-of-whack dynamics in the housing market, including low inventory, rapid home value appreciation and weak sales volumes. None of these problems will be solved overnight, in large part because negative equity will likely be a part of the housing market for years and easily into the next decade in some hard-hit areas. But we’re moving in the right direction, and time will heal all wounds.”
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