Underwater Borrowers: 32 States Show Declining Shares of Negative Equity

Underwater Borrowers: 32 States Show Declining Shares of Negative EquityQuarter over quarter, 32 states saw a decrease in negative equity share through the fourth quarter 2013, mostly due to rising home prices across the country, according the latest CoreLogic Equity Report.
Negative equity is carried by “underwater borrowers” who owe more on their mortgage than the values of their homes.
Negative equity share nationwide remained the same from Q3 2013 to Q4 2013 at 13.3 percent, said CoreLogic. The number of underwater borrowers remained at 6.5 million.
The total dollar amount of negative equity was down $230 billion in 2013, falling $3 billion from the previous quarter to $398 billion in Q4 2013.
Negative equity shares show sharp differences when broken out by price tiers.
Homes valued at less than $100,000, for example, accounted for 14.4 percent of the total negative equity dollars nationally in Q4 2013. Negative equity share for this category was the highest at 25.4 percent, 12.1 percentage points above the national share of 13.3 percent.
Homes valued between $100,000 and $200,000 make up almost a third of the total negative equity dollar amount with a negative equity share of 16.2 percent.
At the other end, homes valued at more than $200,000 make up 55 percent of the negative equity dollars nationwide and have a negative equity share of 8.1 percent.
This trend suggests that there is a high concentration of negative equity mortgages in the low-end of the housing market, CoreLogic says.
Quarter over quarter, the number of properties that were owner-occupied and had less than 20 percent equity — considered under-equitied — increased by 2.0 percent, or 172 thousand homes, to the current level of 9.0 million properties in Q4 2013.
Investor properties, similarly, rose by 3.1 percent, or 42,000 homes, quarter over quarter to the current level of 1.3 million homes.

Leave a Reply

Your email address will not be published. Required fields are marked *