The number of Americans who owe more on their home mortgages worth increased at the end of last year, preventing many people from selling their homes in a housing market and weak.
About 11.1 million households, or 23.1 percent of all mortgaged homes were under water in October-December quarter, according to the report released Tuesday by CoreLogic housing company data. This depends on 22.5 percent, or 10.8 million households in the July-September quarter.
The number of mortgages under water had fallen in the last three quarters. But that was mainly because most houses had fallen into foreclosure.
underwater mortgages tends to increase when home prices fall. Housing prices in December reached its lowest level since the housing crisis in 11 of the 20 largest U.S. metropolitan areas. In a healthy housing market, about 5 percent of homeowners are under water.
Approximately two thirds of Nevada homeowners with a mortgage had negative home equity, the worst in the country. Arizona, Florida, Michigan and California were next, with a maximum of 50 percent of homeowners with mortgages underwater States.
Texas had the lowest percentage of homeowners in the water in the October-December quarter, at 5.8 percent. Only nine states had rates below 10 percent.
In addition to the more than 11 million households are under water, another 2.4 million homeowners are close to this point.
When a mortgage is under water, the homeowner often can not qualify to refinance mortgages and has little recourse but to continue making payments in hopes of eventually recovering property value.
Falling housing prices began to stabilize last year. However, prices should continue falling in many markets due to still high levels of exclusion and unemployment.
This means that purchases of homes at the height of the housing boom is unlikely that the recovery of lost power for years.
underwater mortgages also hurt home sales. Homeowners who might otherwise refuse to sell your house to take a loss or can not get the bank accepts a short sale - where a lender allows a borrower sells the property for less than the amount owed on the mortgage .
Home sales have been weaker in areas where a large number of homeowners with negative equity.
Many banks also are requiring homebuyers to put as much as 20 percent of the value of a house down payment and the Obama administration is pushing for a 10 percent payment requirement on all conventional loans secured by mortgage giants Fannie Mae and Freddie Mac sick
Few homeowners in states hit by foreclosures, Colorado, Georgia and Nevada, with 20 percent or more equity in their homes. higher payments for it increasingly difficult for people to sell their home.
The total amount of negative equity increased to $ 751 billion in the country, over 744 billion U.S. dollars the previous quarter.
