Share of Underwater Homes Declines in 3Q

The proportion of U.S. mortgages that were underwater dropped from the second quarter to the third quarter, according to RealtyTrac.

Seriously underwater homes represented 12.7% of all properties with a mortgage, as of Sept. 30, according to RealtyTrac’s U.S. Home Equity & Underwater Report. That was down from 13.3% at the end of the second quarter.

“Home sales volume and average sales prices picked up dramatically again in the second and third quarters of this year, resulting in a substantial drop in seriously underwater homeowners,” Daren Blomquist, vice president at RealtyTrac, said in a news release.

The number of seriously underwater homes peaked in the second quarter of 2012, at 28.6% of all homes.

Additionally, the number of seriously underwater homes that were in a state of foreclosure declined, dropping to 33.4% of all homes, as of the end of the third quarter, from 34.4%, at the end of the second quarter.

RealtyTrac defines seriously underwater as a home where the combined loan amount secured by the property is at least 25% higher than the property’s estimated market value.

 

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