| 1 in 4 Homeowners with Upside Down Mortgages |
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| Written by Amber | |
| Friday, 27 November 2009 | |
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This week the Wall Street journal presented a shocking statistic: 1 in 4 homeowners currently owe more on their homes than they're worth. A recent report by First American CoreLogic, a real estate research company based in Santa Ana, California states that nearly 10.7 million households ended the third quarter with negative equity in their homes. That's about 23% of nationwide homeowners. Considering the current housing crisis, the numbers are not shocking – simply sobering as we contemplate the future of the housing market in the United States. This statistic does not bode well for the upcoming year: many of those "underwater" mortgages may be heading for delinquency. They'll be joining Nevada and Florida: both states are suffering between 14% and 15% serious delinquencies on foreclosures. Nationally, First American CoreLogic states that 6.02% of homes are in serious delinquency. The recent government housing stimulus is a golden lining in a dismal housing market. Despite the bleak outlook, there have been some recent positive statistics. The National Association of Realtors reported that the sales of previously occupied homes increased to 10.1% from September to a seasonally adjusted annual rate of 6.1 million, which is the highest rate since February 2007. In addition, the extended New Home Tax Credit is boosting the sales of the new homes, which were up 24% in October compared to the previous year. Finally, banks are making an attempt to work with homeowners to restructure mortgages if possible: most people prefer to stay in their homes even when the property value has declined. However, restructuring a mortgage is not possible in every situation and banks continue to acquire foreclosure homes, only perpetuating a collapsing housing market. As we look forward to 2010 the housing market can't claim to be glowing. Yet homeowners are making an effort to save their homes, even when upside-down on their mortgages. The government stimulus efforts have boosted sales and there are signs of stability. We'll be waiting on the sidelines with crossed fingers for good news. |
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