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Sunday, December 22, 2013

Over 1 in 8 Mortgages Still Owe More Than The House Is Worth Five Years After The Collapse.

Report: 6.4 Million Home Mortgages Still Underwater

Tuesday, 17 Dec 2013 12:44 PM
By Dan Weil
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Approximately 6.4 million homes were still underwater at the end of the third quarter, meaning homeowners owed more on their mortgages than the homes were worth, according to a study from research firm CoreLogic.

Those 6.4 million homes account for 13 percent of all U.S. residences with mortgages.

To be sure, the number of underwater homes fell 791,000 in the third quarter. In the second quarter, 7.2 million residences were underwater, or 14.7 percent of those with a mortgage.


"Rising home prices continued to help homeowners regain their lost equity in the third quarter of 2013," said CoreLogic Chief Economist Mark Fleming.

The S&P/Case-Shiller index of home prices soared 13.3 percent in the year through September.

Meanwhile, homeowners' negative equity dropped 8 percent, or $33.7 billion, in the third quarter to $397 billion, according to CoreLogic.

"Negative equity will decline even further in the coming quarters as the housing market continues to improve," Fleming explained.

In terms of the states with the highest percentage of underwater homes, Nevada led the pack last quarter with 32 percent, followed by Florida with 29 percent and Arizona with 23 percent.

"We should see a further rebound in consumer confidence and economic growth in 2014 as more homeowners escape the negative equity trap," said Anand Nallathambi, CEO of CoreLogic. "Home price appreciation has helped more than 3 million property owners regain equity since the first quarter of 2013."

New home sales rose 25 percent in October, and experts say housing is playing a major role in the economic recovery.
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"Real estate took us into this mess, and in some ways real estate is going to lead us out of it,'' Frank Friedman, chief financial officer of consulting firm Deloitte, told USA Today.



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