Here's great news for home buyers: The number of Twin Cities homeowners who have a mortgage that exceeds the value of their house continues to dwindle. During the first quarter just 8.0 percent of all homeowners with a mortgage in the metro were underwater, according to the latest report from CoreLogic.That's a slight decline from last year at this time when the negative equity rate stood at 10.7 percent and 10.2 percent nationwide.
Why should home buyers care? Negative equity has been a drag on house listings. When someone is underwater on their mortgage, they've very unlikely to put their house on the market. So with every dip in the negative-equity rate, the potential pool of house listings increases. Right now, for example, nearly 50,000 Twin Cities homeowners are underwater.
Here's how Anand Nallathambi, president and CEO of CoreLogic, summarizes the situation: "With the economy improving and homeowners building equity, albeit slowly, the potential exists for an increase in housing stock available for sale, which would ease the current imbalance in supply and demand. There are still about 5 million homeowners who are underwater and we estimate that a further 5 percent appreciation in home values across the U.S. would reduce the number of owners with negative equity by about one million."
