Report: Underwater Home Rate ‘Stagnant’ in One-Third of U.S. Counties
The Center for American Progress, Washington, D.C. released a study showing nearly 1,000 U.S. counties continue to present “increasing or stagnating” percentages of homes with negative equity.
The report said an additional 600 additional counties have seen some improvement, though they still include high percentages of underwater homes. The report said many counties experiencing an increase in their percentages of underwater homes tend to be located in nonmetropolitan areas, which are less likely to have the resources necessary to speed a full housing recovery. “There are also counties located in metropolitan areas where the number of underwater homes is beginning to decline but where too many homeowners still owe more on their home than it is worth in today’s housing market,” CAP said.
CAP rated more than 2,000 counties in categories depending on its current negative equity rate and changes in the percentage of underwater homes over time: robust; rebounding; stable; stagnant; slipping; or sinking. It said negative equity between 2011 and 2015 typically concentrated in certain areas of the country.
“More than seven years after the housing bubble burst, there are still hundreds of counties across the United States where significant numbers of underwater homes exist,” said Michela Zonta, senior policy analyst with CAP and co-author of the report. “While negative equity across the board has decreased since 2011, what these data tell us is that the crisis has not eased in all corners of the country, and policymakers need to pay close attention to these areas.”
Zonta said the negative equity crisis is a “dynamic phenomenon,” as it varies in magnitude and impact over time. It also shows that trends in negative equity are consistent with trends in other socioeconomic indicators, as changes in negative equity rates are significantly correlated with variations in household formation, job growth and income levels. “Renter affordability is a growing problem for the large majority of counties as a result of the pressure on the rental market generated by the foreclosure crisis,” she said.
The Mortgage Bankers Association will release its 3rd Quarter National Delinquency Survey on Tuesday, Nov. 17.
