A new report released today says that rising home prices have left fewer homeowners in the shadows. Being underwater means you owe your home more than it’s worth. This was a major problem during the housing crisis – but not now.
Real estate data company ATTOM said that in the second quarter of this year, only about 4% of mortgaged homes were under water, with the homeowner owing at least 25% more than the value of the home. Jennifer von Pohlmann of ATTOM attributes this to rising house prices.
“It really helps homeowners get out of whatever hole they might find themselves in,” she said.
Pohlmann does not expect such a wave of foreclosures, as we saw in 2010, at the height of the housing crisis, when, Daryl Fairweather, chief economist at Redfin, said nearly a quarter of homeowners were underwater. She said that instead of divesting foreclosures, there could be forced sales.
“Even if you may be one of the homeowners who have to sell their home because you can’t make the monthly mortgage payments, at least you will leave with quite a lot of money because of how much the house value has gone up.” Fairweather said. said.
Because you get everything that is left after the house is sold and the mortgage is paid off.