Zillow reports that 28.4% of all single-family homes with mortgages are under water due to lower home values
About four years ago my family went on a short trip with another family to do a little spring skiing. At dinner one night I had a discussion with someone about the deteriorating home market, repeating something I had read in the WSJ about the number of homes then in default (late on a mortgage payment, but not in foreclosure). For some reason the person I was speaking to thought I was just making up the numbers, things couldn’t be that bad, could they?
Today, however, Zillow has reported that things are, indeed, that bad. According to the online real estate information company, 28.4 percent of all U.S. homes with mortgages currently have negative equity – that is, are worth less than the total amount outstanding on the mortgage. It is simply an astonishing number, and along with continuing high unemployment, one of the reasons the U.S. economy continues to under perform.
Things are not much better on the foreclosure front, either. According to Zillow, in March “one out of every 1,000 homes in the country was lost to foreclosure.”
“Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” said Zillow Chief Economist Dr. Stan Humphries.
According to Zillow’s report, the Phoenix area is suffering the worst, with 68.4 percent of all homes with negative equity. Tampa is at 59.8 percent, Atlanta at 55.7 percent, and Sacramento at 51.2 percent.