Improved housing market means fewer underwater mortgages

Fewer South Florida homeowners are plagued with problem mortgages, a new report shows.
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In the second quarter of 2015, 16 percent of mortgaged homes and condominiums were "underwater" in Palm Beach, Broward and Miami-Dade counties, down from 22 percent a year earlier, real estate website Zillow.com said Thursday.
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In Broward County, 53,984 properties were underwater in the second quarter, while 34,276 properties in Palm Beach County were worth less than what's owed.

Fueled by rising home prices, the tri-county region's so-called negative equity rate has dropped in every quarter since early 2012.

During the height of the housing bust, close to half of all homes with mortgages were underwater, according to Zillow. Those owners likely bought or refinanced from 2004 to 2006, before prices plunged across the area.

Underwater mortgage holders can't sell without paying thousands of dollars at closing, and they can't easily leave the area for new jobs. Some frustrated owners have walked away from the homes.

Svenja Gudell, chief economist for Seattle-based Zillow, said lower-priced home values have shot up recently, helping to reduce the number of burdensome mortgages.

The least expensive third of homes in the three counties (below $159,100) saw values increase by about 11 percent in July from a year ago, while the most expensive tier (above $316,550) increased in value by about 4 percent, Gudell said.

Despite the steady improvement, home price appreciation is expected to slow in the coming months, meaning many homeowners won't soon shake their underwater mortgages, Gudell said.

"For some folks who are deeply underwater, it will still take years," she said. "We've made great strides, but we still have a ways to go to get back to a normal market."

South Florida's 16-percent negative equity rate is slightly above the national average of 14 percent. Among the nation's 35 largest housing markets, Las Vegas (25 percent), Chicago (22 percent) and Atlanta (21 percent) have the highest rates, Zillow said. San Jose, Calif., had the lowest rate at 3 percent.

see more at: http://www.sun-sentinel.com/business/realestate/fl-underwater-mortgages-20150903-story.html