Negative Equity Recedes in Third Quarter; Fewer than 30% of
Homeowners with Mortgages Now Underwater
SEATTLE, Nov. 15, 2012 /PRNewswire/ -- Negative
equity fell in the third quarter, with 28.2 percent of all
homeowners with mortgages underwater, down from 30.9 percent in the
second quarter, according to the third quarter Zillow® Negative
Equity Report[i]. This is the first time negative equity has fallen
below 30 percent, and is the biggest quarter-over-quarter drop in
negative equity, since Zillow revised its method for determining
negative equity in the first quarter of 2011.
Slightly more than 14 million U.S. homeowners with a mortgage
were in negative equity, or underwater, in the quarter, owing more
on their mortgages than their homes are worth. That was down from
15.3 million in the second quarter. Additionally, the nation's 30
largest metro areas covered by Zillow's report experienced
quarter-over-quarter declines in negative equity.
Much of the decline in negative equity can be attributed to U.S.
home values rising 1.3 percent in the third quarter compared to the
second quarter, to a median value of $153,800, according to the Zillow Home Value
Index (ZHVI)[ii].
"The fall in negative equity rates means homeowners have
additional options for refinancing or selling their homes," said
Zillow Chief Economist Dr. Stan
Humphries. "But 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."
Of the 30 largest metro areas covered by the report, the five
experiencing the largest quarterly declines in negative equity were
Phoenix (-6.2 percentage points),
Las Vegas (-5.5 percentage
points), Denver (-4.9 percentage
points), Sacramento, Calif. (-4.6
percentage points) and Orlando
(-4.2 percentage points).
These results are from the third edition of the Zillow Negative
Equity Report, which looks at current outstanding loan amounts for
individual owner-occupied homes and compares them to those homes'
current estimated values. Loan data is provided by TransUnion®, a
global leader in credit and information management. This is the
only report that uses current outstanding loan balances on all
mortgages when calculating negative equity. Other reports estimate
current outstanding loan balance based on the most recent loan on a
property (i.e., the original loan amount at time of purchase or
refinance).
Metropolitan Area
|
Q2
2012:
% of
Homeowners w/
Mortgages in Negative
Equity
|
Q3
2012:
% of
Homeowners w/
Mortgages in Negative
Equity
|
United
States
|
30.9%
|
28.2%
|
New
York
|
20.7%
|
19.4%
|
Los
Angeles
|
28.6%
|
25.9%
|
Chicago
|
39.2%
|
36.6%
|
Dallas-Ft.
Worth, Texas
|
28.9%
|
25.7%
|
Philadelphia
|
25.4%
|
23.8%
|
Washington
DC
|
31.3%
|
28.5%
|
Miami-Fort
Lauderdale, Fla.
|
43.7%
|
41.4%
|
Atlanta
|
54.4%
|
50.4%
|
Boston
|
19.6%
|
17.5%
|
San
Francisco
|
28.5%
|
25.1%
|
Detroit
|
48.3%
|
45.2%
|
Riverside,
Calif.
|
51.2%
|
47.3%
|
Phoenix
|
51.6%
|
45.5%
|
Seattle
|
37.8%
|
34.2%
|
Minneapolis-St. Paul, Minn.
|
38.7%
|
35.5%
|
San
Diego
|
33.9%
|
30.6%
|
Tampa,
Fla.
|
46.6%
|
43.2%
|
St.
Louis
|
30.2%
|
28.0%
|
Baltimore
|
30.8%
|
28.1%
|
Denver
|
27.1%
|
22.2%
|
Pittsburgh
|
15.6%
|
14.3%
|
Portland,
Ore.
|
33.2%
|
29.3%
|
Sacramento, Calif.
|
49.3%
|
44.7%
|
Orlando,
Fla.
|
51.9%
|
47.7%
|
Cincinnati
|
30.3%
|
27.6%
|
Cleveland
|
32.9%
|
29.8%
|
Las
Vegas
|
68.5%
|
63.0%
|
San
Jose
|
20.3%
|
17.6%
|
Columbus
|
33.4%
|
29.6%
|
Charlotte
|
36.4%
|
33.6%
|
About Zillow, Inc.
Zillow (NASDAQ: Z) is the leading
real estate information marketplace, providing vital information
about homes, real estate listings and mortgages through its website
and mobile applications, enabling homeowners, buyers, sellers and
renters to connect with real estate and mortgage professionals best
suited to meet their needs. In addition, Zillow operates an
industry-leading economics and analytics bureau led by Zillow's
Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of
economists and data analysts produce extensive housing data and
research covering more than 350 markets at Zillow Real Estate
Research. Zillow, Inc. operates Zillow.com®, Zillow Mortgage
Marketplace, Zillow Rentals, Zillow Mobile, Postlets®,
Diverse Solutions™ and Buyfolio™. The company is headquartered in
Seattle.
Zillow.com, Zillow, Postlets and Diverse Solutions are
registered trademarks of Zillow, Inc. Buyfolio is a trademark of
Zillow, Inc.
TransUnion is a registered trademark of Trans Union LLC.
[i] The data in the Zillow Negative Equity Report incorporates
mortgage data from TransUnion, a global leader in credit and
information management, to calculate various statistics. The report
includes, but is not limited to, negative equity, loan-to-value
ratios, and delinquency rates. To calculate negative equity, the
estimated value of a home is matched to all outstanding mortgage
debt and lines of credit associated with the home, including home
equity lines of credit and home equity loans. All personally
identifying information ("PII") is removed from the data by
TransUnion before delivery to Zillow. Overall, this report covers
over 800 metros, 2,100 counties, and 22,200 ZIP codes across the
nation.
[ii] The Zillow Home Value Index is the median Zestimate®
valuation for a given geographic area on a given day and includes
the value of all single-family residences, condominiums and
cooperatives, regardless of whether they sold within a given
period. The Home Value Index at the national level includes data
from over 80 million homes in almost 3,000 counties and over 850
core-based statistical areas. It is expressed in dollars and is for
a particular geographic region.
(ZFIN)
SOURCE Zillow