The housing market’s downturn was so severe that it has taken years to even begin approaching pre-meltdown normalcy, but as it improves, more homeowners are finding themselves in much better financial positions.
During the third quarter of the year, negative equity in the housing market took a sizable tumble, according to the latest data from the tracking firm Zillow. Now, the number of homeowners nationwide who are underwater on their mortgages stands at 28.2 percent, down from the 30.9 percent observed in the previous three-month period. It’s also the first time negative equity slumped below 30 percent since the company started tracking the data in the first quarter of 2011.
Still, though, 28.2 percent of the total housing market means more than 14 million homeowners have an underwater mortgage some six years after the housing crisis began, the report said. But in the third quarter alone, that was a decline of about 1.3 million people. Experts attribute the turnaround to rising home value, as prices jumped 1.3 percent in the third quarter.
“The fall in negative equity rates means homeowners have additional options for refinancing or selling their homes,” said Zillow chief economist Dr. Stan Humphries. “But while we’re moving in the right direction, a substantial number of homes are still locked up in negative equity, unable to enter the existing re-sale market despite the desires of their owner. The housing market has found real momentum of its own, but is not immune from shocks to the broader economy.”
During this period, all 30 of the nation’s largest metropolitan areas saw quarterly declines in negative equity, the report said. Among the highlights on this list were Atlanta, which fell to 50.4 percent of properties, but were dealing with those as high as 54.4 percent just three months ago. Similarly, Las Vegas saw negative equity slip to just 63 percent of homes from 68.5 percent. Phoenix also saw a decline, to 45.5 percent from 51.6 percent.
Obviously, many housing markets still have a long way to go in terms of recovering, and those are typically the ones that also took the biggest hit when the housing downturn began. Mortgage delinquency and default have been major problems in much of the Southwest and Southeast for years, and only now are meaningful improvements beginning to be made.
Image: Jerry7171, via Flickr