The Decline in Negative Equity

Services for Real Estate Pros with Think Glink Media

Negative equity – owing more on your mortgage than what your house is worth – has negatively affected homeowners over the past six years. Families have dug into their retirement savings in order to afford their properties and avoid foreclosure.

For the first time in years, negative equity has sharply declined because of the increased value of homes in many real estate markets.

According to Federal Reserve data, home equity rose by $457.1 billion in the first quarter of 2012, a 7.4 percent increase from the previous quarter. 

This decline in negative equity can have unintended consequences.

Home prices have risen primarily because of the inventory drought, and a major reason this drought exists is negative inventory: owners can’t afford to sell. However, as home values rise and push homeowners out of negative equity, these owners will take advantage of their ability to sell. 

To read more about the effects of the decline in negative equity in the 2012 home-buying season, read the full blog post here.

Have you seen evidence of negative equity decline in your neighborhood? What were the consequences? 





Ilyce Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at, The Equifax Personal Finance Blogand CBS Moneywatch She is Chief Content Strategist at, a community for real estate investors.



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Ilyce Glink

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