Photo: Flickr via yopuz
Although the number of underwater homeowners has declined in the U.S., the under 40 sect are the ones most likely to be stuck with homes worth far less than they bargained for.About 31 per cent of U.S. homeowners–– 14.9 million–– are considered “underwater” on their mortgage, slightly down from 31.4 per cent during the first quarter of 2012, according to a new report by real estate tracker Zillow.
More than 7 million of those homeowners are under the age of 40. Gen X borrowers are in the worst shape, with over half those aged 30 to 34 living in homes purchased for less than what they’d sell for in today’s market.
“We hear about tight inventory in many markets, and it’s clear where this is coming from,” says Zillow Chief Economist Dr. Stan Humphries. “Negative equity is trapping young people in their homes, preventing them from selling. These homes are likely the very starter homes potential first-time homebuyers are seeking.”
Underwater borrowers today owe an average of $72,235 more than the value of their home, or about 43.9 per cent.
The good news at least is that younger homeowners are least likely to have trouble meeting their monthly mortgage payments. The 20 to 24 crowd were about 3 per cent less likely to miss a payment compared to older borrowers, though it’s worth noting that they make up a far smaller proportion of homeowners.
It’s still surprising to see just how different real estate markets in various cities are from one another (Zillow’s interactive map is a cool way to see). More than half of homeowners in Phoenix, Az., Atlanta, Ga., and Orlando, Fla. are underwater, whereas less than 30 of those living in New York and Denver, Colo. are underwater.
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This story was originally published by Zillow.The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
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