Friday, August 27, 2010

The sky is still falling on the housing market

This hits hard on people who want to downsize, move to take a new job, or retire. You may not be anywhere near foreclosure, but the lousy housing market affects everyone.

CoreLogic, which provides information to businesses and gobernment, reports that 11 million, or 23 percent, of all residential properties with mortgages were in negative equity at the end of the second quarter of 2010, down from 11.2 million and 24 percent from the first quarter of 2010.

Foreclosures, rather than meaningful price appreciation, were the primary driver in the change. An additional 2.4 million borrowers had less than five percent equity. Together, negative equity and near negative equity mortgages accounted for nearly 28 percent of all residential properties with a mortgage nationwide.

"Negative equity continues to both drive foreclosures and impede the housing market recovery. With nearly 5 million borrowers currently in severe negative equity, defaults will remain at a high level for an extended period of time," said Mark Fleming, chief economist with CoreLogic.

Here's the graph.

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