Real estate rebound buoys underwater borrowers

housing-bubble-1368555069By Anya Martin | The Wall Street Journal

As the real-estate market rebounds, many luxury homeowners who just a few years ago had their heads underwater are now only ankle deep.

At the end of the first quarter, 20.6% of homes with jumbo mortgages were underwater, meaning the owners owed more on the mortgage than the home was worth. That’s compared with 32.3% a year ago, according to real-estate website Zillow.com Z -2.77% .

More important, the level of negative equity has improved significantly for homeowners, said Stan Humphries, chief economist for Zillow. “Nationally most people in negative equity are in relatively shallow water, with less than 20% negative equity,” he said, meaning that borrowers’ loan-to-value percentage is less than 120%.

The Zillow analysis includes homes that have one jumbo mortgage and whose unpaid balance is still at a jumbo level, above the threshold for government-backed loans of $417,000 in most areas of the country and $625,500 in certain high-price home markets, such as New York, San Francisco and Boston.

Continued: 

Share this!

Additional Articles

News Categories

Get Our Twice Weekly Newsletter!

* indicates required

Rose Law Group pc values “outrageous client service.” We pride ourselves on hyper-responsiveness to our clients’ needs and an extraordinary record of success in achieving our clients’ goals. We know we get results and our list of outstanding clients speaks to the quality of our work.