SALT LAKE CITY — A new report shows that 28.6 percent of homeowners owe more on their mortgages than their homes could sell for. That's nearly three out of every 10, nationwide.
The quarterly report from the real estate Zillow indicates the 28.6 percent is worse than the second quarter number, which was 26.8 percent, and about the same as the first quarter number of 28.4 percent.
Dave Anderton, a spokesman for the Salt Lake Board of Realtors, said last month roughly two in 10 people in Utah are underwater in their mortgages.Associated PressIn this May 9, 2008 file photo, a foreclosure sign stands outside an existing home on the market in Denver. A new report shows that 28.6 percent of homeowners owe more on their mortgages than their homes could sell for.From the archive
- Yes, you can still sell your home in a down market – June 27, 2011
- In confusing market, is it time to rent or buy? – June 13, 2011
- Underwater mortgages rise as home prices fall – March 8, 2011
- Fewer homeowners underwater in the third quarter – Dec. 13, 2010
- Home prices falling faster in most metro areas – Nov. 30, 2010
"About 20 percent of Utahns are in a negative equity position, we call it, or owe more on their mortgage than what their home is worth or what someone is willing to pay for it," he said.
Home prices, which have been declining for four years after peaking in 2007, are a factor. Nationally, Zillow says home prices dipped 0.2 percent from second quarter to third quarter this year. Year-over-year, though, home prices have dropped 4.4 percent.
Of the 157 metropolitan areas covered in the Zillow Real Estate Market Report, 105 showed quarterly home value depreciation and 26 metro areas saw quarterly home values go up, and the remaining 26 metros saw no change.
"In (Salt Lake) County, home prices are still falling," Anderton said. "We're just hoping we see an end to the falling prices, especially for homeowners."
Zillow chief economist Stan Humphries predicts home values will go down another 3-5 percent before reaching bottom in 2012 at the earliest. He thinks the foreclosure market will remain "robust" for the next two to four years.
Experts say another reason the number of underwater homeowners appears to have increased from 2008 and 2009 is a change in how long the foreclosure sale process takes. The "robo-signing" scandal surfaced in 2010 when people were signing off on foreclosure paperwork in large numbers without properly reviewing the files.
That has changed, but experts say as a result there are added delays to foreclosure sales. That has boosted the number into the 26-28 percent range, instead of the 21-23 percent range prior to 2010.
Elsewhere around the nation, Zillow says more than 66 percent of homeowners in Phoenix are underwater in their mortgages. In Atlanta the rate is 58.7 percent and in Riverside, Calif., the rate is 51.4 percent.
Wednesday, November 9, 2011
28.6 percent of homeowners nationwide owe more than their home is worth, report says | Deseret News