Underwater Homeowners In St Louis Drops To Lowest Rate In Two Years

During the fourth quarter of 2018, 14.2% of the homeowners in St Louis with a mortgage, were underwater on their mortgage, meaning they were in a negative-equity postion, according to data just released by ATTOM Data Research.  As the table below shows, this is the lowest rate since the 4th quarter of 2017 when the St Louis undertwater homeowner rate was at 13.8%.  On a national level, just 8.8% of homeowners with a mortgage are underwater which puts the St Louis rate at 161.5% of the US rate.

St Louis Underwater (Negative-Equity) Homeowners – 2013-2018

St Louis Underwater (Negative-Equity) Homeowners - 2013-2018

Number of St Louis Homeowners With Negative Equity Continues To Drop In Most Areas

Over the past couple of years, as the St Louis real estate market has continued performing well, mortgage delinquencies and foreclosures have continued to decline.  Rising home value has also caused the number of “underwater” homeowners, also known as homeowners in a negative-equity position (meaning their mortgage balance exceeds their homes current value) to decline as well.  As the table below shows, 5 of the seven St Louis area counties listed saw a decline in the number of underwater properties in the 3rd quarter of this year from a year ago.  The largest decline in underwater properties was St Charles with a 35% decline.  The two exceptions, the city of St Louis and St Clair County, Il, saw an increase in underwater property of 2% and 14% respectively.

St Louis Underwater (Negative-Equity) Properties – 3rd Quarter 2017

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St Louis Underwater (Negative-Equity) Properties - 3rd Quarter 2017

Number Of St Louis Homeowners In Negative Equity Position Declines Nearly 20 Percent In Past Year

In the St Louis area during the 2nd quarter of this year, there were 30,407 (5.4 percent of all residential properties) with negative equity, or underwater, according to a report just released by Corelogic.  This is a decline of nearly 20 percent (19.89%) from a year ago when there were 37,581 St Louis homeowners in a negative equity position.

In addition to the homeowners that are underwater, or in a negative equity position, during the 2nd quarter of 2017 there were 9.660 homeowners, or another 1.7 percent of all homeowners with a mortgage, that were in a “near-negative” equity postion (they have less than 5% equity), according to the report.

Negative Equity and Underwater Defined
Two terms that we didn’t hear much prior to the real estate market bubble burst in 2008 were negative equity and underwater. However, after the bubble burst, we heard those terms a lot and now, even 9 years later, still are. So, what is considered “negative equity” or being “underwater” for a homeowner? Basically, in a nutshell, it means the homeowners current home loan balance is greater than the current value of their home leaving them in a position where they cannot sell their homes without “bringing money to the table.” For homeowners in a “near negative-equity position” they are better off since they have some equity (5% or less) but, since the cost of selling a home and relocating typically exceeds that amount of equity, those homeowners could face the plight of having to bring money to the closing as well, making it hard to sell for many homeowners in this position.

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St Louis Homeowners With Negative Equity Falls 10 Percent

St Louis Homeowners With Negative EquityThere were 88,367 St Louis homeowners with negative equity during the first quarter of this year, according to a report just released by CoreLogic.  This represents 15.7 percent of the St. Louis homeowners with a mortgage and is a decline of 10 percent from the prior quarter when there were 98,365 St Louis homeowners with negative equity, or 17.5 percent of all St Louis homeowners with a mortgage.

For the State of Missouri as a whole, there were 120,056 homeowners, or 15.3 percent of all homeowners with a mortgage, with negative equity during the first quarter of this year.  On a national level, there were 9.7 million, or 19.8 percent of all homeowners with a mortgage, with negative equity, or underwater, during the quarter.

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