SEATTLE, May 30, 2018 /PRNewswire/ -- More than a decade
after the housing market collapsed, the recovery has passed another
milestone. The share of homeowners who owe more than the value of
their home is 9.1 percent, falling below 10 percent for the first
time since the housing market fell, according to Zillow®'s 2017 Q4
Negative Equity Reporti.
The typical U.S. home lost more than a quarter of its value when
the market crashed, sending millions of homeowners into negative
equity, when their homes' values were lower than the balances on
their mortgages. Now, though, national home values are higher than
ever, and many owners who held on to their homes throughout the
housing crisis have resurfaced on their mortgages.
Still, despite the progress made as the negative equity rate
falls, 4.4 million homeowners remain underwater, and about 713,000
of them owe at least twice as much as their homes' value.
Negative equity acts as a drag on the overall housing market,
extending beyond homeowners who are underwater. Low inventory is
one of the main factors in driving home values higher, as demand
from millennials – the largest group of homebuyers – exceeds the
available supply. Underwater homeowners are contributing to this
shortage, holding on to their homes instead of selling for a
loss.
"For much of the country the Great Recession is an increasingly
distant memory - the American economy is booming once again and
markets are now shifting their gaze to future downturn risks," said
Zillow senior economist Aaron
Terrazas. "But scattered in neighborhoods across the
country, the legacy of the mid-2000s housing bubble and bust
lingers among the millions of Americans still underwater on their
mortgages, trapped in their homes with no easy options to regain
equity other than waiting. Their struggles mean there are fewer
homes on the market for homebuyers today. In corners of the country
where home values have been stagnant in recent years, recent
homebuyers can easily fall underwater, particularly those who buy
with small down payments."
Nationally, roughly one in seven homeowners with a mortgage
(15.4 percent) have some equity in their home, but likely not
enough to sell and comfortably use the proceeds for a down payment
on another home. Including these homeowners with limited equity,
the nation's "effective" negative equity rate jumps to 24.6
percent.
Detroit homeowners have the
furthest to go to regain positive equity. In the metro, 25.4
percent of homeowners currently in negative equity – or about
22,000 – still owe at least double the value of their home.
Metropolitan
Area
|
Total
Number
of Homes in
Negative
Equity
|
Negative
Equity
Rate
|
% Of
Underwater
Owners Who Owe
200% of Home
Value
|
Effective
Negative
Equity Rate
|
United
States
|
4,382,044
|
9.1%
|
16.3%
|
24.6%
|
New York,
NY
|
195,314
|
8.9%
|
11.0%
|
21.4%
|
Los Angeles-Long
Beach-Anaheim, CA
|
74,326
|
4.7%
|
8.7%
|
12.2%
|
Chicago,
IL
|
253,725
|
15.5%
|
20.0%
|
34.1%
|
Philadelphia,
PA
|
122,703
|
11.6%
|
15.1%
|
28.7%
|
Washington,
DC
|
120,347
|
11.3%
|
13.6%
|
31.6%
|
Miami-Fort
Lauderdale, FL
|
72,704
|
8.7%
|
16.3%
|
20.4%
|
Atlanta,
GA
|
93,663
|
9.9%
|
16.4%
|
26.3%
|
Boston, MA
|
35,102
|
4.4%
|
10.9%
|
13.7%
|
San Francisco,
CA
|
20,179
|
3.1%
|
7.2%
|
8.0%
|
Detroit,
MI
|
84,799
|
10.8%
|
25.4%
|
24.9%
|
Riverside,
CA
|
46,147
|
7.4%
|
10.0%
|
23.3%
|
Phoenix,
AZ
|
61,917
|
8.7%
|
14.8%
|
26.0%
|
Seattle,
WA
|
31,764
|
5.0%
|
10.5%
|
13.9%
|
Minneapolis-St Paul,
MN
|
38,535
|
6.4%
|
12.0%
|
26.7%
|
San Diego,
CA
|
23,290
|
5.3%
|
8.2%
|
17.4%
|
St. Louis,
MO
|
63,477
|
12.0%
|
16.5%
|
30.9%
|
Tampa, FL
|
34,963
|
7.5%
|
11.9%
|
21.7%
|
Baltimore,
MD
|
72,892
|
14.2%
|
17.2%
|
35.8%
|
Denver, CO
|
24,886
|
4.9%
|
9.1%
|
15.7%
|
Pittsburgh,
PA
|
39,717
|
9.6%
|
15.5%
|
23.2%
|
Portland,
OR
|
16,249
|
4.0%
|
7.5%
|
13.5%
|
Charlotte,
NC
|
28,957
|
6.8%
|
18.6%
|
20.9%
|
Sacramento,
CA
|
19,479
|
5.4%
|
9.5%
|
18.4%
|
Orlando,
FL
|
27,166
|
7.8%
|
12.4%
|
22.4%
|
Cincinnati,
OH
|
37,859
|
9.4%
|
15.8%
|
27.6%
|
Cleveland,
OH
|
49,554
|
13.0%
|
22.0%
|
28.2%
|
Kansas City,
MO
|
21,902
|
6.0%
|
15.6%
|
21.1%
|
Las Vegas,
NV
|
29,385
|
9.9%
|
14.7%
|
27.5%
|
Columbus,
OH
|
24,403
|
7.0%
|
18.6%
|
21.2%
|
Indianapolis,
IN
|
26,987
|
7.4%
|
17.0%
|
24.0%
|
San Jose,
CA
|
5,168
|
1.9%
|
4.5%
|
4.8%
|
Virginia Beach,
VA
|
49,944
|
16.7%
|
17.4%
|
44.5%
|
Nashville,
TN
|
16,152
|
5.3%
|
15.8%
|
16.3%
|
Providence,
RI
|
18,400
|
6.7%
|
11.5%
|
21.2%
|
Milwaukee,
WI
|
21,816
|
8.2%
|
14.3%
|
25.0%
|
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
great real estate professionals. In addition, Zillow operates an
industry-leading economics and analytics bureau led by Zillow
Group'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. Launched in 2006, Zillow
is owned and operated by Zillow Group, Inc. (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
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SOURCE Zillow