Photo Credit: hydefoundation.org
Recent reports on the state of the local housing market have pointed out what those of us in the business have observed upclose: the rise in housing prices throughout the tri-county region has created equity wealth for thousands of homeowners. During the third quarter 2016, the number of South Florida homeowners who have at least 50% equity in their homes rose by more than 92,000, while the number of 'underwater mortgage homeowners' declined, as follows:
Quarter ended September 30,
Number of Homeowners with
at least 50% home equity 390,753 298,555
% of Total Homeowners 25.7% 20.3%
Number of 'underwater mortgages' 246,731 322,701
Source: ATTOM Data Solutions, Irvine, Ca.
ATTOM Data Solutions, a research firm based in Irvine Ca. notes that the reason for the increase in equity rich homeowners is twofold: first, home prices rose 10% during the third quarter 2016 over the comparable period in 2015 and, secondly, more homeowners are staying in their homes, rather than cashing out and moving to larger and/or more expensive homes. The decision to remain in their homes is both a function of caution (many homeowners remember the market downtown ten years ago) and the scarcity of available homes to move to. What this may mean for future Homebuyers is continued lean inventory from which to choose and upward pressure on home prices (especially if mortgage interest rates remain below 5%).