According to Zillow’s Q3 2007 Home Value Report released today, as of September 30th, 15.6% of homeowners who purchased a home in the last year owe more on their mortgage than the current value of the property.The data also revealed that 17.5% of homeowners nationwide who purchased a home two years ago were stuck with negative equity.
That compares to a mere 1.8% of homeowners experiencing negative equity who purchased homes five years ago.
The rise in negative equity comes after home values declined for the fourth straight quarter, experiencing a 5.7% drop year-over-year, the largest decline in over a decade, according to Zillow.
“The decline in home values picked up steam in the third quarter, posting the largest nationwide year-over-year drop in more than a decade,” said Stan Humphries, Zillow’s vice president of data and analytics.
“Continuing depreciation coupled with the downward trend in the size of mortgage down payments has left many new home owners ‘upside down’ on their mortgage, meaning they owe more than the current value of their home.
Areas hit worst include California’s Central Valley (Stockton and Merced), Las Vegas, and parts of Florida which have seen negative equity rates up to five times the national median thanks to double-digit depreciation.
But overall, homeowners who put down a median down payment of 10% in the last two years now have median equity of 13%.
However, it’s a far cry from the 9.4 percent annualized growth rate many homeowners enjoyed over the past five years.
Some areas bucked the downward trend, including housing markets in the Pacific Northwest and Honolulu, Hawaii.
