“Housing is definitely on the road to recovery, Zillow chief economist Stan Humphries told Yahoo Finance in a recent interview. “It’s been a little bit of see-saw this spring with some months up and some months down, but the long-term trend in both existing and new home sales (has) been positive. Home sales are starting to moderate and we are starting to see normal home buyers come back into the marketplace.”
Humphries said “normal” meant that there were more first-time buyers in the market and fewer all-cash purchases.
However, a study by CoreLogic suggests that the recovery has been decidedly lopsided. The data firm found that the housing rebound has been centered primarily on more expensive homes. According to the study, 15% of homes under $200,000 were underwater at the end of March, compared to just 6% of more expensive homes.
Homes in the bottom third of the price continuum have also had a harder time recovering price than those in the top third, Yahoo Finance reported. Between 2006 and 2015, the median value of bottom-third homes in the U.S. dropped 13% to $101,900. Those in the top third fell only 4.5% to $325,800.
“Because of that, you find that you’re three times more likely to be underwater on your mortgage if you’re in the bottom one-third of the housing stock,” Humphries told Yahoo Finance. “This is a real problem that creates real inventory problems for that class of housing.”
The U.S. housing market seems to be on the road to recovery from the 2008 financial meltdown, with both new and existing home sales hitting post-crisis highs in recent weeks. But that recovery has been lopsided, according to a new study.