Deeply Underwater Properties Down

IRVINE, CA-A total of 10.7 million residential homeowners nationwide owe at least 25% or more on their mortgages than their properties are worth, according to RealtyTrac. Also, another 8.3 million homeowners are either slightly underwater or slightly above water, putting them on track to have enough equity to sell sometime in the next 15 months without resorting to a short sale, the firm reports.

While 10.7 million homeowners may sound like a daunting figure, representing 23% of US residential properties with a mortgage, this number is down from 11.3 million deeply underwater properties representing 26% of all residential properties with a mortgage in May and down from 12.5 million deeply underwater properties representing 28% of all residential properties with a mortgage in September 2012, according to the firm.

“Steadily rising home prices are lifting all boats in this housing market and should spill over into more inventory of homes for sale in the coming months,” says Daren Blomquist, VP of RealtyTrac. “Homeowners who already have ample equity are quickly building on that equity, while the 8.3 million homeowners on the fence with little or no equity are on track to regain enough equity to sell before 2015 if home prices continue to increase at the rate of 1.33% per month that they have since bottoming out in March 2012.”

The 8.3 million homeowners slightly under or above water include homeowners with a loan-to-value ratio from 90% to 110%, meaning they have between 10% positive equity and 10% negative equity, RealtyTrac reports. These homeowners represent 18% of all US homeowners with a mortgage as of the beginning of September.”

As GlobeSt.com reported in August, “More and more homes are now coming on the market from non-distressed homeowners thanks to the snap back in pricing that homeowners have experienced over the past 12 months or so,” according to Rich Cosner, CEO of Prudential California Realty, part of the RealtyTrac Network covering Orange, Riverside and San Bernardino counties. Cosner echoed the positive findings of the firm's previously revealed foreclosure report, on which GlobeSt.com reported earlier.

For the complete report from RealtyTrac, click here.