Fewer Homeowners ‘Underwater’
Fewer U.S. homeowners are in negative equity, (or ‘underwater’) on their homes these days, though Atlanta still has some problems to overcome in this area, according to some new figures from online real estate seller Zillow.
Negative equity occurs when the amount owed on a home mortgage loan exceeds the market value of a home. According to Zillow, the national negative equity rate at the end of 2013 was down to 19.4%. It hasn’t been below 20% in years, so this is something of a happy milestone.
Zillow said that rising home values in 2013 lifted 3.9 million American homeowners out of the negative equity trap.
However, Atlanta still “beats” the national average, with a full 35% of area homeowners in negative equity. Worse, when Zillow calculated “effective” negative equity for Atlanta, the figure rose to 54.1%. This “effective” negative equity includes those homeowners with a mortgage with 20% or less equity in their homes, Zillow said.
The good news for Atlanta is that the negative equity rate is forecast to drop quite a bit through 2014, to just under 30%.
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