Did the media tell you that almost a third of U.S. mortgagors were underwater? Well, what they meant was that about 23% were underwater.
First American CoreLogic, which estimates the numbers many media outlets use, has changed its methodology from the last survey. It now no longer assumes that home equity lines of credit have been completely drawn down (fair), and it credits payments that mortgagors have made to pay down their principal (duh).
The net result is that the housing situation looks better than it did a few months ago. Still bad, but better.
WSJ: The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.
Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif…
The latest First American data aren’t comparable to previous estimates because the company revised its methodology. First American now accounts for payments made by homeowners that reduce principal, and it no longer assumes that home-equity lines of credit have been completely drawn down.
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