According to recent third quarter numbers, the national negative equity rate fell at a rapid pace. Despite this quick freefall, the number of people with underwater mortgages is still high. Twenty-one percent of all American homeowners are still underwater with their mortgage. These statistics come from the Zillow Negative Equity Report for the third quarter of 2013.
Large Number Still Trapped
The decline in underwater mortgages is definitely encouraging, but you may have a hard time convincing those still experiencing mortgage debt. If the number of people close to being underwater are included, the number of underwater homeowners is close to 39%. Current numbers suggest some 10.8 million Americans are currently experiencing mortgage debt, down from more than 15 million at the beginning of 2012.
Frozen in Place
Underwater mortgages are keeping millions of Americans in a stressful holding pattern. Without having more than 20% of equity in a home, it is usually not possible to list the home on the market. This keeps people from escaping bad financial situations, moving for a new job, and much more. Numbers show that the worst underwater mortgage rates are in Las Vegas and Atlanta, at 39.6% and 38.2% respectively. The lowest percentages in the country belong to San Jose and Denver. Only 7.8% of homeowners in San Jose, and 11.9% in Denver, are underwater.
Getting out can be tough for those experiencing mortgage debt. Because ordinary sales are usually not possible, homeowners must approach their lender about a short sale. Short sales usually allow the lender to use the proceeds of the sale to settle the debt at hand.