Source: CBS News —
Surging mortgage rates aren’t just raising the cost of purchasing a new home. An alarming number of recent homebuyers have discovered they already owe more on their property than it’s worth, according to a new analysis.
Some 250,000 people who took out a mortgage this year to buy a home are now underwater, meaning they owe more on their loan than the home is worth, Black Knight, a mortgage software provider, found. Another million have less than 10% equity.
Those unlucky homebuyers got caught in the crunch between historically high housing prices and rapidly rising mortgage rates, which in recent months have caused real estate values to slide.
While the portion of underwater mortgages is still historically low, “a clear bifurcation of risk has emerged between mortgaged homes purchased relatively recently versus those bought early in or before the pandemic,” Black Knight said.
All told, 8% of mortgages taken out this year are underwater — about one in 12 homes purchased in 2022.
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Whats with so many characters carying on about housing markets slipping sliding or crashing. There many housing markets. Some areas have been declining for years. In many there’s a housing shortage. Building and land costs have gone up. That will push up existing home prices. Theres plenty of fully employed people needing housing. The crazy rental market in some areas will keep people from leaving homes to go to rentals. I think there’s a group of people that would ust love to think the market will crash again. If you recall the last on was due to criminal activity and greed on Wall Street and with corrupt lenders. That shouldn’t be in play now. Try not to listen to all the noise. Focus on facts.
10% equity in many homes is a lot of money.