We really don’t know if it is a record breaking year because the year isn’t over yet but according to this article in Housing Wire, using data from Zillow, a record breaking 28.4% of home owners owe more on their homes than they could sell them for.
Condos
How did this happen? Home values nation wide have dropped some 30% from what they were during the peak in 2006. That same year and the year before and after were also record breaking years in the number of homes that were sold. It would be interesting to know how many people that have owned their homes for more than a decade owe more on the home than it is worth because they took advantage of low rates and refinanced one or more times. That and the fact that interest rates were low and just about anyone . . probably even your dog . . . could qualify for a mortgage created the perfect storm for frantic home buying. Unemployment was low during those years, inflation was low and gasoline and food prices were lower than they are now. Life was good why not buy a home?
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Unemployment is lower in Minnesota than it is in other states but the jobs don’t seem to pay as well as they used to. We don’t have as many home buyers this spring as we have had in the past and that is hurting home prices and values.
There is some good news in all of this. If 28% of home owners are upside down then that means that 72% of home owners owe less on their homes than they are worth.
