Commercial Real Estate
Negative equity dips in second quarter
By Seattle Business Magazine August 23, 2012
About 38 percent of Seattle homeowners have mortgages in negative equity, according to a study by Seattle-based Zillow.com.
The percentage of Seattle homeowners who owed more than their home was worth dropped slightly, from almost 40 percent in the first quarter of 2012. This reflects a national trend of decreasing amounts of homeowners underwater on their mortgages in the second quarter: 30.9 percent of U.S. homeowners15.3 million peoplehave mortgages in negative equity, according to the Zillow report.
Zillow chief economist Stan Humphries attributed the declining trend to rising home values in the second quarter. But Humphries said that despite the decreasing numbers of homeowners who were underwater on their mortgages, young people continued to be disproportionately affected by negative equities.
“Negative equity is trapping young people in their homes, preventing them from selling. These homes are likely the very starter homes potential first-time home buyers are seeking, said Humphries in a statement.
According to the study, nearly half of U.S. homeowners under 40 have mortgages in negative equity.