Over the last few years the decline in the economy has left many people in a negative equity situation. However, an analysis of 2012 figures by CoreLogic has shown that 1.3 million property owners gained back some equity in the value of their homes in the early part of 2012.
During the second quarter of the year, an estimated 600,000 borrowers reached a zero-equity stage, meaning that the value of their homes was equal to the balance of the mortgage. This increase in the prices of homes decreased the level of negative equity by approximately $2 billion nationally. Another encouraging fact is that a reported 84.9% of negative equity borrowers are continuing to pay their mortgages.
If house prices continued to increase by 5% nationally, this would place almost another two million borrowers currently in a negative equity situation into zero equity.
Statistically, Nevada had 59% of mortgages in a negative equity situation, which is the highest national figure. Florida followed with 43%, Arizona with 40%, Georgia with 36% and Michigan had 33%. These states combined accounted for 34.1% of the US’s full amount of negative equity.
CoreLogic’s analysis also showed that within the group of 10.8 million borrowers in an underwater position, 6.6 million of them hold a first lien without a home equity loan. The average balance of their mortgages is $216,000, with $51,000 of that underwater.
By the end of the second quarter of 2012, approximately 17 million borrowers would qualify for the Home Affordable Refinance Program with mortgages that were 80 to 125% of the value of their homes.
The trend of negative equity is more apparent with the lower value side of the housing market. In homes with a value of less than $200,000, the percentage of negative equity is 32% as opposed to the 17% of borrowers with a home value of more than $200,000
If you are interested and would like to find out more information about Stephenville homes or any Erath County homes, please contact us.