Underwater Mortgages

One of the most positive symptoms of the housing recovery has been the marked decrease in underwater mortgages. With buyer activity accelerating since 2012, and home prices rising as a result, many homeowners faced with toxic equity gradually saw their troubled property holdings submerged. This has left a range of Americans with the space to sell or refinance their property, which has gone a respectable distance to further stabilize the U.S. housing market.

That being said, certain metro regions remain troubled by elevated levels of underwater mortgage. According to a recently published USA Today report, a small constellation of populous cities lag behind the national recovery in terms of the proportion of threatened mortgages. The USA Today story outlines that the national rate of underwater mortgage was 23.8% at the close of Q2, and that particular American are sustaining underwater mortgage volumes notably over 50% the national average.

Certain metros will come as no surprise. Notoriously troubled Detroit has a standing rate of underwater mortgage which tallies at 37.0%, among the highest in the nation for any major city. There appears to be a trend of elevated toxic real estate equity throughout Florida and the Deep South. Atlanta has an underwater mortgage rate of a full 44.4%, the second highest in the nation. The USA Today report also notes that Florida’s three largest metro regions have uneasily high rates of underwater mortgage as well. The Miami-Fort Lauderdale region has an underwater mortgage rate of 34.1%, while the Tampa and Orlando areas have rates of 36.6% and 39.8% respectively.

The American Southwest also lags behind the national average in terms of the amount of homeowners burdened with underwater mortgages. Nearly half of Las Vegas’ homeowners are struggling with some form of negative equity, as 48.4% of all homeowners are handling underwater loans. …read more