SEATTLE, Dec. 3, 2015 /PRNewswire/ -- The U.S.
negative equity rate continued to drop in the third quarter of
2015, according to the Zillow® Negative Equity Report.i
Nationally, 13.4 percent of homeowners owe more on their mortgage
than their home is worth, down from 14.4 percent last quarter, and
16.9 percent a year ago.
Negative equity is one of the most persistent reminders of the
housing market crash. Homeowners who owe more on their mortgage
than their homes are worth cannot sell, which holds back markets
from recovering.
Typically, negative equity rates will be close to 2-5 percent.
Today, eight years after the housing crash, it remains a major
barrier to a full recovery in certain markets. In Las Vegas, 22 percent of homeowners remain
underwater, and another 19 percent are effectively underwater,
meaning they have less than 20 percent equity in their home and
therefore can't cover the cost of selling their home and buying
another.
Las Vegas has had the highest
negative equity rate in the country for the past four and a half
years, and Kansas City and
Cleveland, with 16.6 and 16.8
percent negative equity respectively, are not far behind.
San Francisco and San Jose are the only large markets where less
than five percent of homeowners are underwater.
Almost a million homeowners were freed from negative equity in
the third quarter of 2015. The improving rate means those people
may be able to sell or refinance their homes before mortgage
interest rates rise, as they are expected to do in the coming
weeks.
"Negative equity has become almost an afterthought in a handful
of the nation's hottest markets, but is holding back the recovery
in dozens of large markets nationwide," said Zillow Chief Economist
Dr. Svenja Gudell. "Despite steady
declines in negative equity, many cities are still facing tight
inventory, especially among entry-level homes. Those homes that are
available are often not in demand and stay on the market for a long
time. This can be extremely frustrating for buyers and sellers
alike, as they come face to face with the difficult side effects of
negative equity."
Negative equity affects individual homeowners, but markets with
high negative equity rates tend to have fewer homes for sale,
especially lower-priced homes favored by first-time homebuyers. In
markets with a lot of negative equity, homes generally take longer
to sell than in other places.
Below are the top five large metros with the highest and lowest
percent of homeowners underwater.
Smallest Share of Underwater Homeowners
- San Jose, CA – 3.0
percent
- San Francisco, CA – 4.7
percent
- Denver, CO – 5.5 percent
- Dallas-Fort Worth, TX – 5.8
percent
- Portland, OR – 6.2
percent
Largest Share of Underwater Homeowners
- Las Vegas, NV – 22.1
percent
- Chicago, IL – 20.6
percent
- Atlanta, GA – 18.6
percent
- St. Louis, MO – 17.6
percent
- Baltimore, MD – 16.9
percent
Metro
Name
|
Q3 2015 Effective
Negative Equity Rate
|
Q3 2015 Negative
Equity Rate
|
Q3 2014 Negative
Equity Rate
|
United
States
|
30.2%
|
13.4%
|
16.9%
|
New York-Northern New
Jersey
|
24.3%
|
11.5%
|
13.6%
|
Los Angeles-Long
Beach-Anaheim, CA
|
16.6%
|
7.1%
|
7.8%
|
Chicago,
IL
|
37.8%
|
20.6%
|
25.3%
|
Dallas-Fort Worth,
TX
|
18.4%
|
5.8%
|
9.3%
|
Philadelphia,
PA
|
33.8%
|
15.5%
|
18.1%
|
Houston,
TX
|
18.4%
|
6.2%
|
7.4%
|
Washington,
DC
|
34.2%
|
15.7%
|
18.4%
|
Miami-Fort
Lauderdale, FL
|
26.1%
|
14.7%
|
20.1%
|
Atlanta,
GA
|
37.9%
|
18.6%
|
27.1%
|
Boston, MA
|
18.3%
|
7.1%
|
9.6%
|
San Francisco,
CA
|
11.0%
|
4.7%
|
7.3%
|
Detroit,
MI
|
29.8%
|
16.6%
|
22.0%
|
Riverside,
CA
|
30.7%
|
14.3%
|
18.2%
|
Phoenix,
AZ
|
35.4%
|
16.4%
|
21.7%
|
Seattle,
WA
|
25.7%
|
10.2%
|
16.2%
|
Minneapolis-St Paul,
MN
|
30.8%
|
11.7%
|
15.6%
|
San Diego,
CA
|
21.6%
|
8.1%
|
10.1%
|
St. Louis,
MO
|
37.6%
|
17.6%
|
22.7%
|
Tampa, FL
|
31.5%
|
15.7%
|
22.0%
|
Baltimore,
MD
|
36.9%
|
16.9%
|
20.1%
|
Denver, CO
|
15.2%
|
5.5%
|
8.2%
|
Pittsburgh,
PA
|
23.3%
|
9.8%
|
10.7%
|
Portland,
OR
|
20.8%
|
6.2%
|
11.2%
|
Charlotte,
NC
|
32.1%
|
11.0%
|
16.5%
|
Sacramento,
CA
|
27.3%
|
11.6%
|
15.7%
|
San Antonio,
TX
|
31.2%
|
10.7%
|
12.2%
|
Orlando,
FL
|
32.6%
|
16.1%
|
21.9%
|
Cincinnati,
OH
|
35.6%
|
14.5%
|
18.7%
|
Cleveland,
OH
|
34.5%
|
16.8%
|
20.7%
|
Kansas City,
MO
|
38.1%
|
16.6%
|
20.7%
|
Las Vegas,
NV
|
41.3%
|
22.1%
|
27.8%
|
Columbus,
OH
|
31.8%
|
12.9%
|
17.6%
|
Indianapolis,
IN
|
37.2%
|
15.5%
|
17.9%
|
San Jose,
CA
|
7.7%
|
3.0%
|
4.5%
|
Austin, TX
|
20.3%
|
6.8%
|
8.0%
|
About Zillow
Zillow® is the leading real estate and
rental marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Zillow also sponsors the bi-annual Zillow Housing Confidence
Index (ZHCI) which measures consumer confidence in local housing
markets, both currently and over time. Launched in 2006, Zillow is
owned and operated by Zillow Group (NASDAQ: Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
i The data in the Zillow Negative Equity Report
incorporates mortgage data from TransUnion, a global leader in
credit and information management, to calculate various statistics.
The report includes, but is not limited to, negative equity,
loan-to-value ratios, and delinquency rates. To calculate negative
equity, the estimated value of a home is matched to all outstanding
mortgage debt and lines of credit associated with the home,
including home equity lines of credit and home equity loans. All
personally identifying information ("PII") is removed from the data
by TransUnion before delivery to Zillow. Overall, this report
covers more than 870 metros, 2,400 counties, and 23,000 ZIP codes
across the nation.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/negative-equity-still-a-drag-on-the-us-housing-market-300187404.html
SOURCE Zillow