Underwater Homes Fall Below 10%

The housing crisis saw many homeowners go underwater with their mortgages, where their outstanding mortgage balance exceeds the actual value of the home. As the market continues to improve, though, it would appear that these days are far behind us. Just last quarter, more than three-quarters of a million US homes regained equity, bringing the percentage of homes with negative equity down to single digits.

Currently, there are approximately 4.4 million properties still underwater, representing about 8.7% of the country’s homes. The national aggregate value of this negative equity was down to $309.5 billion, representing a decrease of 11.6% from the $350 billion a year ago. The total borrower equity rose by $691 billion.

All the same, there is still a fair number of homes that are under-equitied. These homes, which have less than 20% equity, generally have a more difficult time securing a refinancing into a more favorable mortgage rate. They can also easily fall underwater when home prices dip. At present, there are about 9 million under-equitied homes, representing about 17.8% of total homes.

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