With home prices still well below their peak of 2006-2007, one report shows $149 billion worth of homes in the D.C. area are in a negative equity situation, according to First American CoreLogic.
More than 15.2 million U.S. mortgages, or 32.2% of all mortgaged properties, were in a negative-equity position on June 30. This is actually an improvement, as the percent of mortgages in a negative quity position went down from 32.5 percent at the end of March.
The total value of the properties with negative equity for the country is currently $3.4 trillion. Some of those mortgages will most likely be modified downward by the end of the third quarter, and hopefully home prices will continue to improve or at least not get any worse. Short sales will also reduce the total number of homes in negative equity.
For buyers, this shows you that there are still going to be some "motivated" sellers out there, as the foreclosure rate has continued to be fairly strong so far this summer, and may remain elevated at least through the end of this year.
"Negative equity is a strong driver of foreclosures, [a CoreLogic economist] said, and the stunted growth rate in the second quarter is a positive sign that foreclosures may moderate in the future. First American CoreLogic made "very crude" estimates that the foreclosure rate will peak a bit higher than 4% in early 2010, he said."
Comments
Man I wish there were required statistics and logic courses for reporters before they were allowed to write. One in reading comprehension might also help. The $3.4T (national) and $149B figures are the *total property value* of properties that are mortgaged and estimated to be "underwater," not the aggregate negative equity. If a house is estimated to be worth $300k and has a current mortgage balance of $310k, the amount that would go into the $3.4T/$149B figures is $300k but the mortgagee is underwater by only $10k. The publicly available portion of the First American CoreLogic report doesn't say what the figure is that would correspond to the $10k, but we're talking a LOT less than the $149B figure.
Lucky for me, they don't require it.
I'm removing part about the census etc. I think I was grasping there anyway
So your argument is that the $3.4T and $149B are the value of the homes, but they could be just $1 under water.
Got it.
I may take the part out where
I think it's still valid some what to say that
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