Fewer homeowners stuck with ‘underwater’ homes

One of the most pernicious effects of the housing bust was the huge number of borrowers stuck in homes worth far less than those properties could be sold for.

Negative equity has been a major drag on mobility and hence the American economy. Being stuck “underwater” means you can’t sell your house or often even move out if you get a job someplace else.

Now that problem is easing, ever so slightly, with the recent rebound in home prices. About 100,000 borrowers popped into a positive equity position during the third quarter of 2012, mortgage tracker CoreLogic reported Thursday.

“Through the third quarter, the number of underwater borrowers declined significantly,” CoreLogic chief economist Mark Fleming said in a news release. “The substantive gain in house prices made in 2012, partly due to tight inventory caused by negative equity’s lock-out effect, has paradoxically alleviated some of the pain.”

As many as 1.8 million borrowers could have equity in their home in the next year if prices continue to rise, the firm reported.

CoreLogic said that about 10.7 million homes — or about 22 percent of all residential properties with a mortgage — were in negative equity at the end of the third quarter. Negative-equity mortgages and those in a near-negative-equity position accounted for 26.8 percent of all homes with a mortgage.

Negative equity fell to $658 billion at the end of the third quarter, a decrease of $31 billion from the prior quarter. Nevada had the highest percentage of underwater homes at 56.9 percent. After the Silver State came Florida at 42.1 percent and then Arizona at 38.6 percent.

—-

&Copy;2013 Los Angeles Times

Visit the Los Angeles Times at www.latimes.com

Distributed by MCT Information Services

—————

Topics: t000132490,t000023135,t000002537,t000040342,t000023136,t000023122

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

The Safeway store at 4128 Rucker Ave., on Wednesday, Nov. 29, 2023, in Everett, Washington. (Mike Henneke / The Herald)
Kroger and Albertsons plan to sell these 19 Snohomish County grocers

On Tuesday, the grocery chains released a list of stores included in a deal to avoid anti-competition concerns amid a planned merger.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion's 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Inslee energized from visit to Everett fusion firms

Helion Energy and Zap Energy offered state officials a tour of their plants. Both are on a quest to generate carbon-free electricity from fusion.

Awards honor employers who promote workers with disabilities

Nominations are due July 31 for the awards from the Governor’s Committee on Disability Issues and Employment.

Bruce Hallenbeck, 4, picks out Honeycrisp apples for his family at Swans Trail Farms on Wednesday, Oct. 26, 2022 in Snohomish, Washington. The farm is now closed for the season. (Olivia Vanni / The Herald)
Study: Washington residents would pay more for homegrown goods

Local online shoppers are on the look out for the made in Washington label.

Aurora Echo, owner of Wildly Beloved Foods, begins making cavatelli pasta with one of her Bottene pasta machine on Thursday, June 27, 2024 in Clinton, Washington. (Olivia Vanni / The Herald)
Whidbey artisanal pasta maker shares her secrets

For Aurora Echo of Wildly Beloved Foods in Clinton, “sharing food is so ancient; it feels so good.”

Lynnwood
New Jersey auto group purchases Lynnwood Lexus dealership land

Holman, which owns Lexus of Seattle in Lynnwood, bought property on which the dealership resides.

Two couples walk along Hewitt Avenue around lunchtime on Wednesday, Oct. 19, 2022 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Everett businesses say it’s time the city had its own Chamber of Commerce

The state’s seventh-largest city hasn’t had a chamber since 2011. After 13 years, businesses are rallying for its return.

Students Mary Chapman, left, and Nano Portugal, right, work together with a fusion splicer and other equipment during a fiber optic technician training demonstration at Sno-Isle TECH Skills Center on Tuesday, May 28, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Sno-Isle students on the path to becoming fiber professionals

The state will roll out $1.2 billion to close gaps in internet access. But not enough professionals are working to build the infrastructure.

Washingtonians lost $250M to scammers in 2023

Identity theft, imposter scams and phony online ads were the most common schemes, a new study says.

LETI founder and president Rosario Reyes, left, and LETI director of operations Thomas Laing III, right, pose for a photo at the former Paroba College in Everett, Washington on Saturday, June 1, 2024. (Annie Barker / The Herald)
Woman brings Latino culture to business education in Snohomish County

Rosario Reyes spent the past 25 years helping other immigrants thrive. Now, she’s focused on sustaining her legacy.

Annie Crawley poses for a photo with her scuba gear at Brackett’s Landing near the Port of Edmonds on Saturday, Feb. 3, 2024 in Edmonds, Washington. (Annie Barker / The Herald)
Edmonds ocean activist to kids: Life is better under the sea

From clownfish to kelp, Annie Crawley has been teaching kids and adults about the ocean’s wonders for three decades.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.