Report: 21.5% of U.S. Homeowners with ‘Underwater’ Mortgages

The percentage of U.S. homeowners in negative equity, or with “underwater” mortgages, slipped to 21.5 percent in the second quarter, down slightly from 23.3 percent in the first quarter and 23 percent a year ago, according to the real estate data site Zillow.com.
Zillow also reports that home values continued to decline in the second quarter, with its Home Value Index falling 3.2 percent from a year ago, and 0.6 percent from the first quarter.
Foreclosures again reached a new peak in June, with more than one out of every 1,000 (0.11 percent) U.S. homes being foreclosed upon during the month, the site reported.
Zillow’s data is aggregated from public sources for 124 major metropolitan areas across the country.
Shifts in home values vary widely depending on location.
For example, Zillow found that in California, where both federal and state tax credits were available to some homebuyers, more than a quarter (27.8 percent) of markets saw increases in home values in the past year. In five California markets, values have increased for the last five quarters, and four of those have increased by more than 5 percent since the second quarter of 2009.
Zillow’s Home Value Index was up 7.3 percent year-over-year in the San Diego metropolitan statistical area (MSA); up 5.9 percent in the San Francisco MSA; up 5.6 percent in the San Jose MSA; and up 5.5 percent in the Los Angeles MSA.
“Meanwhile, home values in Florida and Arizona continued to show dramatic declines, with home values in the Miami-Fort Lauderdale MSA falling 15.2 percent year-over-year and home values in the Phoenix MSA falling 11.8 percent,” Zillow reported.
“As the national housing market limps toward stabilization, individual markets are a mixed bag,” said Zillow Chief Economist Dr. Stan Humphries. “The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid – and likely unsustainable – rates of appreciation in many markets across the state.”
Read Zillow’s report.

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