The number of homes worth less than their outstanding mortgages fell slightly in the first three months, according to figures released Tuesday by CoreLogic Inc. (NYSE: CLGX), a Santa Ana, Calif.-based real estate data firm.
In Oregon, 17.2 percent of homes are worth less than their mortgages and another 5.8 percent had near-negative equity. Collectively, Oregonians owe $121.9 billion on 696,142 mortgages on properties worth a total of $175 billion.
“The current economic indicators point to slow yet positive economic growth, which will slowly reduce the risk of borrowers experiencing income shocks,” said Mark Fleming, chief economist with CoreLogic. “Yet the existence of negative equity for the foreseeable future will weigh on the housing market recovery by holding back sale and refinance activity.”
Negative equity occurs when a borrower owes more than the home is worth. “Near-negative” refers to homes with less than 5 percent equity, a figure that would be wiped out by transaction costs if the property were sold.
In Washington state, 16.9 percent of homes had negative equity and 5.8 percent had near-negative equity. Collectively, Washingtonians owe $291.7 billion on 1,412,110 mortgages on properties worth a total of $429.1 billion.
Nevada, where 63 percent of all mortgaged homes are worth less than the outstanding loan balance, led the nation for negative equity. The other top five states were Arizona, 50 percent, Florida, 46 percent, Michigan, 36 percent and California, 31 percent. Nevada, Arizona and Florida showed improvement from the prior quarter.
The average “underwater” home is worth $65,000 less than the outstanding mortgage balance.
- Report: Residential market hits double dip, by Wendy Culverwell, Portland Business Journal (oregonrealestateroundtable.com)
- The 13 States Where Homeowners Are Drowning Under Mortgage Debt (businessinsider.com)
- Portland Disparity Study Delivers Mixed Results, by Wendy Culverwell, Portland Business Journal (oregonrealestateroundtable.com)
- US DATA: CoreLogic released negative equity data….. (forexlive.com)
- SBA opens 504 refinancing to more firms, by Kent Hoover, Portland Business Journal (oregonrealestateroundtable.com)
- Rentals getting tough to find, Wendy Culverwell, Business Journal (oregonrealestateroundtable.com)
- 38% Of Homeowners With Second Mortgages Are Underwater (inquisitr.com)