Mortgages Blog

Finance Blogs » Mortgages » More homeowners above water

More homeowners above water

By Judy Martel · Bankrate.com
Tuesday, March 4, 2014
Posted: 1 pm ET

For millions of homeowners, steadily rising home prices in 2013 meant they could finally get their heads above water. According to a recent survey, 3.9 million borrowers gained enough equity in their homes that they no longer owe more on their mortgage than the home is worth.

home-equity-generic-6-lgAlthough 9.8 million borrowers are still underwater with negative equity in their homes, the rising tide of prices should continue to lift more homeowners into positive equity.

According to CoreLogic, home values improved by 12 percent from January 2013 to January 2014. States with the highest price jumps include some of the same markets with high rates of negative equity, including Las Vegas and parts of California.

Not enough equity to earn a profit

One of the barriers to an improving housing market is lack of homes for sale. This is partly because there aren't enough homeowners who can afford to sell, even as their home equity improves. Homeowners with 20 percent or less equity, estimated at more than a third of borrowers, wouldn't be able to sell their homes for enough profit to pay expenses and buy another one.

Economists polled by The Associated Press say they expect home price growth to slow a bit, predicting a 5 percent increase in the coming year. Meanwhile, mortgage rates haven't moved much so far this year. The latest Bankrate survey of large lenders shows the 30-year fixed mortgage rate at 4.48 percent, down 1 basis point from a week earlier.

Keep up with your wealth and mortgages and follow me on Twitter: @JudyMartel.

Get real-time rate quotes with Bankrate's Mortgage app.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
Add a comment

(Comments may take 5-10 minutes to appear)