In Q3, 14 million or 28.2 percent of American homeowners were in negative equity – in which a borrower owes more on their mortgages than their home worth – according to the latest negative equity report from Zillow.
The number is actually down from 30.9 percent the previous quarter thanks to rising home prices.
But Stan Humphries, chief economist at Zillow said negative equity rates and home prices face risks from the broader economy.
"While we’re moving in the right direction, a substantial number of homes are still locked up in negative equity, unable to enter the existing re-sale market despite the desires of their owner. The housing market has found real momentum of its own, but is not immune from shocks to the broader economy. If negotiations centered on resolving the fiscal cliff don’t inspire confidence in investors and consumers alike, recent home value gains – and, as a result, falling negative equity rates – could stall."
We pulled the 12 U.S. cities where the rate of homeowners in negative equity (i.e. underwater on their mortgages) is highest.
Note:Delinquency rate is the percent of homes that are over 90 days late on their mortgage payments.
Seattle, Washington
Negative equity share:
34.2 percent
Total amount of negative equity:
$20.58 billion
Delinquency rate:
11.0 percent
39.7 percentof underwater homeowners owe 20 percent or less, while9.3 percentof underwater homeowners owe more than double what their home is worth.
Source: Zillow
Minneapolis-St. Paul, Minnesota
Negative equity share:
35.5 percent
Total amount of negative equity:
$15.51 billion
Delinquency rate:
4.8 percent
41.5 percentof underwater homeowners owe 20 percent or less, while 8.1 percentof underwater homeowners owe more than double what their home is worth.
Source: Zillow
Chicago, Illinois
Negative equity share:
36.6 percent
Total amount of negative equity:
$51.07 billion
Delinquency rate:
12.6 percent
34.1 percentof underwater homeowners owe 20 percent or less, while14.2 percentof underwater homeowners owe more than double what their home is worth.
Source: Zillow
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