23% Underwater – your results may vary…..

by Tom on November 24, 2009
in house prices

The Wall Street Journal reports that 23% of all US homeowners are underwater. A couple of thoughts about that statistic:

Your results may vary – I’m certain that it’s higher in some areas (Michigan, Florida, California…..) But it’s also lower in some areas (North Dakota etc.)
This doesn’t specify whether it’s of ALL homeowners or just of the homeowners who have mortgages. I expect it’s of just the homeowners who have mortgages.
5.3 Million households have mortgages that are 20% higher or more than what their houses are worth.

I think we are going to see the “move up” buyer market remain significantly constrained for quite a while because those who want to sell and relocate or just buy a different house (bigger, smaller, in town, out in the country, whatever) can’t do so due to their financial position on the current home.

Tom Vanderwell

Calculated Risk: Mortgages: 23% of Borrowers have Negative Equity

From the WSJ: 1 in 4 Borrowers Under Water

The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23% …

Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home’s value …

[N]egative equity “is an outstanding risk hanging over the mortgage market,” said Mark Fleming, chief economist of First American Core Logic. “It lowers homeowners’ mobility because they can’t sell, even if they want to move to get a new job.”