Categorized | Finance and Mortgage

United States Still Struggling with Underwater Mortgages

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Although all signs are pointing to growth in the United States residential real estate market, nearly a third of all homeowners are still faced with underwater mortgages. That means that roughly sixteen million people owe more on their home than it is actually worth.

The high number of underwater mortgages continues to be a major factor in preventing any kind of major growth in the market, despite record affordability. Many potential homeowners are hesitant to enter the market after seeing the struggle of those stuck with a loan that is tens of thousands more than the value of their home.

Some economists and residential real estate market analysts, however, believe that the current number of homes listed as underwater is deceivingly high. They believe that the overall percentage will soon drop, as it included those homes that will finally be processed as foreclosures after extensive delays.

Surprisingly, ninety percent of homeowners with underwater mortgages make on-time payments, and have no intentions of foreclosing on their homes. The remaining ten percent have been late on their payments by as many as ninety days.

While some homeowners are stuck with underwater mortgages, investors are now eyeing the market again in hopes of flipping homes for profit. With mortgage rates at all-time lows, and housing prices in many states having just hit what many believe to be the bottom, the market for buying and selling homes looks to be regaining strength. Many investors, however, are opting to rent homes that they buy with the intentions of selling the home for larger profit down the road.

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About Josh Johnson

Josh is the main writer for the Residential category. He also helps out on other categories when needed, mainly the International section.

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