Underwater Homeowners Sink Even Deeper

 Despite homes rising 6.6 percent in 2014, lower-tier homes have dropped 3.2 percent in value. Even though the water is rising in real estate, some homes have not risen with the water. The homes that are experiencing the struggle are the lower-end homes. They have actually seen their values drop, keeping their mortgages underwater.

During the recovery, the housing market was seeing improvement, but there has been a reversal for these lower-end homes. At its worst, the housing market saw 15 million homeowners owing more on their mortgages than what their home was worth. This put them in negative equity, commonly known as underwater. Their answer was foreclosures and short sales.

Lower-tier homes have been left behind during the recovery because the demand for them is not what it once was. Homes rose 6.6 percent nationwide last year, but the bottom 10% of homes dropped 3.2 percent. During any recovery there will be someone left behind. Negative equity is 16.9 percent nationally and rising in 21 of the top 50 housing markets. More than a quarter of mortgages homes are underwater in many parts of the Southeast and Midwest.

Atlanta saw homes rise 12.2 percent and almost half of the borrowers with homes valued I the bottom tier are underwater. This compares with 10p percent of borrowers with the highest-valued homes.

 

The major markets with the worst negative equity are:

 

1. Las Vegas, NV – 26.4%

2. Atlanta, GA – 26.1%

3. Chicago, IL – 25.1%

4. St. Louis, MO – 22.8%

5. Cleveland, OH – 21.4%

6. Detroit, MI – 21.3%

7. Tampa, FL – 21.2%

8. Orlando, FL – 20.9%

9. Kansas City, MO – 20.9%

10. Phoenix, AZ – 20.6%

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