Chicago, IL (PRWEB) March 09, 2014
The new Equity Report highlighted that the fact that 13.3% of mortgaged homes have negative equity. To refresh, negative equity is when the borrower owes more on a home than it is worth. As for homes that are under-equitied, "borrowers with less than 20% home equity" accounted for 21.1% of mortgaged homes. Borrows that had less than 5% home equity, represented just 3.3% of mortgaged properties.
Looking deeper into American home equity and Peoples Home Equity was discouraged to see that 92% of higher end homes have equity compared to 81% at the lower end.
As for national loan-to-value ratios, the rate of default is progressively higher with higher loan values. Homes with 125% loan-to-value ratios were more than twice as populated by defaults as home with even 95% to 99% ratios.
Looking at how the market has progressed, both near negative equity values of 95% to 99.9% remained unchanged from 3rd quarter 2013 to 4th quarter 2013. Fortunately loan-to-value ratios of over 100% remained unchanged at 13.3% from the 3rd to 4th quarter. However, mortgage debt outstanding did increase slightly from $8.57 billion to $8.6 billion. Peoples Home Equity thinks a combination of a lack of lower inventory, higher mortgage rates, and property values have contributed to the recent stagnant change in home equity. The market needs more homebuyers to fuel real estate activity and increase home equity.
A look at different states showed that the top 3 states with negative equity were Nevada with 30.4%, Florida with 28.1%, and Arizona at 21.5%. These markets were no surprise to see for Peoples Home Equity, on the positive side Texas (96.1%, Alaska (95.8%), and Montana (95.8%) were the states with the highest positive equity rates. The average loan-to-value ratio was 61.8% for all states. As for metropolitan areas, the Orlando-Kissimmee-Sanford, FL area and Tampa-St. Petersburg-Clearwater, FL area were the highest in negative equity at 31.5% and 30.4%.
Conversely, the Houston-Woodlands-Sugar Land, TX area and Dallas-Plano-Irving, TX areas had the highest percentage of positive equity at 96.2% and 95.3%.
Peoples Home Equity thinks the market will continue to improve relating to negative equity in the U.S. however, the change will be slower than in past years. The lender expects the largest changes of the year to occur during the 2nd and 3rd quarter of spring and summer when relatively more home buyers return after the harsh winter.
Please contact Peoples Home Equity loan officer today for mortgage details at: (855)-897-0300