More than 9 million residential properties in the U.S. were seriously underwater in the first quarter of this year, based on RealtyTrac’s recent report. The term “seriously underwater” refers to homes with a combined loan amount that is 25 percent greater than the estimated market value of the home securing those loans. That represents nearly one-fifth of all properties with a mortgage.
Underwater homes in the first quarter actually decreased to the lowest level we’ve seen since the same quarter in 2012. The trend is expected to continue, with about 200,000 fewer homes underwater when compared to the last quarter of 2013.
Homeowners across the country are experiencing a nice recovering of home equity lost during the recession. It may still be a lengthy recovery for some homeowners to see positive equity again, but overall the housing market is pointing in the right direction.
Residential properties that are near breakeven hover at around 8.5 million nationwide, roughly 15 percent of the country’s homes with a mortgage. Also, foreclosed properties with negative equity continue to recede.
There also exist a fairly high number of homes with equity that are currently in foreclosure. That would tend to signify that homeowners don’t understand whether they have equity in their home or not. Typically, a homeowner with equity could leverage that equity to find a better resolution. Homes with positive equity in the U.S increased to 35 percent in the first quarter of 2014.
Now, more than ever, it is critical that homeowners understand whether their home is underwater or they have positive equity. Distressed property numbers continue to fall and if you DO have equity, the solutions for selling your home are far different than if you have negative equity.
To find out if you have equity in your home, you can get a free house value estimate from our