Shocking statistic: 20% of all U.S. Homeowners are Underwater
Shocking statistic: 20% of all U.S. Homeowners are Underwater
Information was released today which shows that nearly 1/5th of all homeowners in the United States actually owe more on their home than the house is currently worth in re-sale value. This according to Zillow.com
Zillow reports that in the last quarter of 2009 more than 21% of US homeowners who had mortgages far greater than value of the home as the number of properties that are lost to foreclosure continues to rise at a record pace. While this number is up only slightly from the previous quarter, Zillow still reported that more than 1,000 US homes were actually repossessed by lenders in the month of December, which is the highest monthly rate since Zillow started tracking the figure back in 2000.
Stan Humphries, Zillow’s Chief Economist has said that “While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of this year,” after which Mr. Humpries predicts the markets to “bounce along the bottom with real appreciation being negligible for some time.”
Growing number of American homeowners owe more on their home than it is worth
With so many people having a home that is “underwater” greatly increases the chances that these homes could be lost to foreclosure as it is very difficult if not impossible for these homeowners to refinance the home unless they qualify for specific Fannie Mae or Freddie Mac programs. Owing more than the house is worth also makes it much more difficult to sell the house. With home prices dropping for the 12th consecutive quarter, down yet another 5% in 4th quarter of 2009 there does not seem to be much hope in sight for a near term stabilization of prices. Many of these homeowners struggle to find a way to avoid foreclosure.
During that same time (of the month of December) bank sales or REO sales accounted for nearly 20% of all registered closings and in some cities in Florida, California and Nevada these sales made up as much as 60% + of all sales. With an expected 3 million or more foreclosures expected in 2010 one should wonder exactly what this figure will climb to in the months ahead.
An eye opening factoid reported by Zillow.com shows that nearly 29% of the homes sold in the 4th quarter of 2009 were sold for less than the sellers originally paid for them.
posted by : Joe Sloboda, Burgess Law Firm
