Real Estate Gets Another Great Health Report
I was very interested to read the widespread publicity at the beginning of this week for the latest Mortgage Monitor Report by Black Knight Financial Services.
Several findings in the report give us some fascinating insight into how real estate and homeowners are faring on a national basis, and closer to home too.
The key headline was that an amazing 425,000 borrowers who were underwater with their home loans managed to move out of negative equity in the first quarter of this year.
Nationwide, the negative equity rate now stands at just 5.6%, which translates to some 2.8 million borrowers.
It should be remembered that, at the end of 2012, the negative equity rate stood at a horrifying 29% nationally. Indeed, the rate has fallen by 13% in just one year, so we are making fantastic progress, although the current rate is still about five times the level we were at in 2004. No one could deny that it's great that things are heading in the right direction, however.
But the good news in the report doesn't end there. 38 million borrowers now have at least 20% equity in their homes, a national individual average of $116,000. Naturally, the individual average figure is likely to be much higher in our region.
It would be difficult to overstate the importance of this data to the homes market. Fewer people underwater with their borrowing and more homeowners with equity can only make an already fluid market full of buyer confidence even better, as increasing numbers of homeowners feel more comfortable about their next house purchase.
With this news arriving at the same time as mortgage rates are still heading south in the wake of the Brexit fallout, it could be successfully argued that Christmas has arrived very early this year.
The report also looked at annual home price appreciation by state. California is doing very well, with the 7th highest rate of increase nationally, at 6.9%. While this is great news, the state still hasn't surpassed home price levels that we were seeing in 2006, prior to the Great Recession years.
California is far from alone in this respect, though. There is almost a 50/50 split of states that are doing better than in the pre-crisis period. The only states currently showing negative growth are West Virginia and Missouri. The US as a whole is now just 3% shy of the previous peak.
I hope you find this information as interesting and useful as I do. It's so reassuring to see so many people in a better position to move on and welcome news for all homeowners that price appreciation is in such great shape.
As always, please don't hesitate to contact us if you'd like to discuss your own situation in more depth.