Equity Returns to Some Homes in the U.S.
As we have seen in Phoenix Homes prices have risen about 30% per sq. ft. since a year ago
The Niche Report, I feel tracks and gives good information validates my sentient in other parts of the country there is a return in uptrend pricing!
Home prices across the United States have registered gains in each month of 2012, particularly in some metropolitan regions where solid rental markets have emerged. While some real estate analysts have cast of shadow of doubt on the price recovery by pointing out that the purchase activity is mostly the work of investors, hundreds of thousands of households are climbing out of negative equity as a result.
According to a recent report released by real estate analytics firm CoreLogic, more than one million homes in the U.S. have recovered some equity in 2012. For 600,000 homeowners whose principal mortgage balance exceeded the value of their homes, the rising equity in the second quarter of the year means that their properties are no longer underwater.
Earlier this year, CoreLogic reported that 700,000 homes had benefited from the return to positive equity and were no longer in an underwater situation. At the end of March, 23.7 percent of all mortgaged home in the country were underwater; that figure is now down to 22.3 percent and expected to continue improving.
The Tangible Impact of Demand
The mid-year report by CoreLogic includes the greatest increase in home value appreciation since 2006. from July 2011 to July 2012, median home prices in the U.S. rose by 3.8 percent. According to statements made to the press by the California-based analytical firm, an increase of 5 percent could lift an additional two million households from their underwater status.
High demand from real estate investors, rather than purchase activity from average home buyers, has been the catalyst of the significant price increase. This demand has had a tangible impact on the housing market, specially in states like Arizona where home prices have jumped 17 percent since June 2011. In Florida, the gain has been recorded at 6.6 percent. In both states, more than 40 percent of borrowers are still underwater.
The Immediate Benefit of Equity
The regained equity means that homeowners no longer have to request permission from their mortgage lenders to carry on short sales. More importantly, borrowers who are no longer underwater might be able to qualify for a refinance and take advantage of today’s low mortgage interest rates, as well as government initiatives like the Home Affordable Modification Program.
Many borrowers who found themselves in a negative equity situation have been able to hold on and make timely payments on their mortgages -about 84.9 percent according to CoreLogic. These borrowers, who are awaiting further improvements, could soon find themselves in a position to list their homes and stimulate the housing market.