Underwater Mortgages in US Fall to 17%
SEATTLE -- One in six U.S. homeowners with a mortgage -- or 8.7 million Americans -- was underwater in the second quarter despite rising residential values, Zillow reported Wednesday.
This is down from 18.8% in the first quarter and from 23.8% in the second quarter of last year.
Underwater refers to a mortgage holder owing more on his loan than he could sell for.
The effective negative equity rate, or the percentage of homeowners who have less than 20% equity in their houses, fell to 34.8% in the second quarter, says the latest Zillow Negative Equity Forecast. That's down from 36.9% in the first quarter and down from 41.9% year-over-year. Homeowners with less than 20% equity in their residence would likely have a tough time covering the costs of selling their propoerties and purchasing new ones.
Of the 35 largest metros Zillow tracks, more than one-fourth of homeowners in Atlanta (28.9%), Las Vegas (27.4%) and Chicago (27.1%) remained underwater on their properties at June 30. The lowest rates of negative equity were in San Jose, Calif. (4.6%), San Francisco (8.2%) and Austin, Texas (8.3%).
Closer to the Mahoning Valley, the effective equity rate in Cleveland was 20.8%, In Pittsburgh, it was 10.6%.
Zillow projects the national negative equity rate will fall to 14.9% of all homeowners with a mortgage by June 30, 2015.
Published by The Business Journal, Youngstown, Ohio.
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