Since 2007 “move-up” buyers have been largely absent from the housing market. These buyers are those who own a home and want to buy a bigger or more expensive home than they presently own. Before they buy, they typically list and sell their home (which will help increase the low inventory levels we have been experiencing for the past 18 months). The reason these buyers have been on the sideline is simple. When the market crashed, many of them went into a negative equity position on their current home and therefore did not have the necessary down payment to purchase another home. The situation is improving.
Core Logic reports that 850,000 homes went from a negative to a positive equity position in the first quarter of 2013. In the past year, 1.7 million homes have gone back into a positive equity position. This improvement in equity of the typical home owner is due to the solid appreciation we are seeing in home values. We still have a long way to go. 9.7 million homes in the U.S. are still in a negative equity position. That is 19.8% of all homes which carry a mortgage. In the 4th quarter of 2012 that percentage was 21.7%. The good news is we are in recovery.
States with the highest percentage of homes (with a mortgage) in a negative equity position are Nevada (45.4%), Florida (38.1%) and Michigan (32%).
Ready to “move-up” or buy your first home? Contact the Zwahlen Team.