Mortgage Borrowers Finding More Equity in Their Homes
Citing new data from CoreLogic, CNN Money reports that the rise in home prices over the last quarter has led to an increase in mortgage borrowers no longer owing more than their homes are worth.
Taking a closer look at the data, we find that as of the end of June 2013, $14.5 percent, or 7.1 million of mortgage borrowers were still underwater on their loans. But these figures, compared to the 19.7 percent or 9.6 million borrowers who were in this situation at the end of the first quarter, shows significant quarterly growth in this area.
Further putting these numbers in perspective, the news source cites data from late 2009 when 26 percent of all U.S. home owners were underwater on their mortgages.
Rising prices contribute to mortgage borrowers’ success
One of the prevailing factors in homes coming from out of underwater is rising home prices. This is fueled in part, by increased buyer demand ramping up asking prices and leading to heightened competition among prospective buyers.
With high affordability conditions due to low mortgage rate averages, buyers are upping the ante when it comes to how much they’ willing to settle on asking price from a seller. Also helping matters is investor influence.
The news source cited the Chinese as a major contributor to the resurgence in the U.S. housing market over the past several years. It doesn’t matter who is buying the houses as long as they are being sold and at competitive prices. These factors are helping to level off the once struggling housing market.
Despite mortgage rates trending upward in recent month, affordability conditions remain high and long-term mortgage rate averages don’t have the same effect on borrowers with strong credit when compared to borrowers with less than ideal credit. If you’d like to learn more about your financing options, contact us today.