Plummeting home values has led to a record number of home loans being underwater. The value of houses nationwide has been steadily sliding downward as foreclosures, joblessness and tight credit take a toll on real estate. The next year might get worse, as values may continue to fall.
Underwater home loans all over the country
Home prices have been going down. This has been due to the recession effects. Because of continuing foreclosures, high unemployment and fewer homes being sold, the value of houses has continued to trend downward. It is called being under water on a mortgage when more money is owed on a home than it is worth. Currently, 27 percent of American homeowners face this problem, Bloomberg reports. Real estate information company Zillow released a report stating that more than 15 million house loans were under water. Home prices are estimated to have fallen by almost 6 percent in the past year and almost 3 percent since Sept, 2010. A 5 percent decline in 2011 is anticipated. They aren't going up just yet.
Foreclosure change misleading
Foreclosure activity has been closely viewed over the past year in the hopes that a slowing rate of foreclosure would mean a real estate sector close to recovering. The crisis isn't over yet, claims CNN. The slowing rate of foreclosures in January does not mean that. Because of the “robo-signing” scandal, where foreclosures were initiated by banks without reviewing the paperwork, the foreclosure process has been held up. After the foreclosures in court right now go down, it is likely that more personal financing and homes foreclosed on will increase again.
Specific places still doing bad
The foreclosures are making things really hard in areas that have real estate values every high. Nevada, Arizona and CA nevertheless lead the nation in foreclosure-affected states. FL has begun improving lately. Before this, it was in ninth place on the foreclosure rates list.
Information from
Bloomberg
bloomberg.com/news/2011-02-09/home-price-decline-leaves-27-of-u-s-owners-underwater-on-loans.html
CNN
http://money.cnn.com/2011/02/10/real_estate/foreclosure_filings_fall/
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