Negative Equity Decreases in Fourth Quarter of 2012

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The Federal Savings Bank sees the recent rise in negative equity as an opportunity for first-time homeowners to purchase a property as homeowners are looking to exit. In addition those who remain in negative equity are encouraged to look at refinance benefits.

VA and FHA home loans at The Federal Savings Bank

The Federal Savings Bank

2 million American homeowners emerged from negative equity over the course of the year.

Negative equity continued to decrease during the fourth quarter of 2012, The Federal Savings Bank sees this as a sign that the housing market continues to improve.

The decrease in negative equity was released from The Zillow Negative Equity Report showed the figure decreasing to 27.5 percent from 31.1 percent in the fourth quarter of 2011. The report also showed that close to 2 million American homeowners emerged from negative equity over the course of the year.

As home values increase from negative equity to positive equity homeowners will have the flexibility to list their home for sale. As more homes are likely to be listed from the rise in equity, more inventory of homes will ease demand driven price increases that we are experiencing today. While property values are increasing, it will still take time for equity to transition into positive, but we are headed in the right direction.

Americans take advantage of refinancing
At the end of the fourth quarter of 2012, there were approximately 13.8 million homeowners who were underwater on their mortgage, which means they owed more on their mortgage than their homes were worth. The Federal Savings Bank encourages those Americans who are underwater on their mortgage or facing foreclosure to discover the benefits of refinancing. Many lien holders have used the Home Affordable Refinance Program as its number of participants has now jumped to over 2 million.

Refinancing a mortgage allows homeowners to restructure their payments to make monthly bills more manageable. Considering this option is encouraged because mortgage rates are at decade lows across all states. To read more about refinancing benefits please visit:

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