Negative equity falls but still a drag
The proportion of US homes in negative equity has continued to fall but there are still a large number of homes underwater according to a new report. Zillow’s Negative Equity Report shows that in the third quarter 13.4 per cent nationally owe more on their mortgage than their home is worth, down from 14.4 per cent in the last quarter and 16.9 per cent in the third quarter of 2014. Eight years after the crash, the reduction still leaves the percentage of homes that are underwater far higher than the typical 2-5 per cent.
"Negative equity has become almost an afterthought in a handful of the nation's hottest markets, but is holding back the recovery in dozens of large markets nationwide," said Zillow Chief Economist Dr. Svenja Gudell. "Despite steady declines in negative equity, many cities are still facing tight inventory, especially among entry-level homes. Those homes that are available are often not in demand and stay on the market for a long time. This can be extremely frustrating for buyers and sellers alike, as they come face to face with the difficult side effects of negative equity."
Zillow says that Las Vegas has the largest share of underwater homes at 22 per cent followed by Chicago (20.6 per cent), Atlanta (18.6 per cent), St. Louis (17.6 per cent) and Baltimore (16.9 per cent). San Jose has the lowest proportion at 3 per cent followed by San Francisco (4.7 per cent), Denver (5.5 per cent), Dallas-Fort Worth (5.8 per cent) and Portland (6.2 per cent).
Mortgage rates edge lower
The average rate of most mortgage types decreased in the week ending December 3 according to Freddie Mac’s Primary Mortgage Market Survey. 30-year FRM’s averaged 3.93 per cent, down from 3.95 per cent a week earlier; 15-year FRM’s averaged 3.16 per cent, down from 3.18 per cent; 5-year ARM’s averaged 2.99 per cent, down from 3.01 per cent; and 1-year ARM’s averaged 2.61 per cent, an increase from the previous week’s 2.59 per cent.
Former Bruce Willis home lists in New York
An apartment once owned by Bruce Willis is on the market at The Eldorado at 300 Central Park West, Manhattan. The home was also previously owned by U2 guitarist Adam Clayton. It is listed by banker Armen Avanessians and his wife who also own another unit which will be listed soon. The New York Post notes that the two properties could be combined into a duplex. The former Willis home has 3 bedrooms, 3.5 bathrooms and 3,150 square feet. It is listed at $12.9 million.