A slowing in the pace of home-price declines helped bring down the portion of home loans with negative equity - the situation where borrowers owe more on their mortgage than their home is worth - according to data from First American CoreLogic.
More than 15.2 million U.S. mortgages, or 32.2% of all mortgaged properties, were in a negative-equity position on June 30, edging down from 32.5% at the end of March, according to the real-estate information company, which tracks data on about 90% of mortgage loans nationwide.
The aggregate property value for loans in a negative-equity position was $3.4 trillion, according to the report.
Negative equity can occur because of a decline in property value, an increase in mortgage debt or a combination of both. Equity levels are important to people who can't make their mortgage payment since it affects their ability to sell or refinance, said Mark Fleming, chief economist for First American CoreLogic.
The slight drop in the portion of underwater loans reflects the recent flattening of home price changes, which is "great news" for the housing market as negative equity has been increasing for a number of periods, Fleming said.
Still, he stressed that this decrease is a quarterly comparison, not the yearly comparison typically used in house prices.
Negative equity is a strong driver of foreclosures, Fleming said, and the stunted growth rate in the second quarter is a positive sign that foreclosures may moderate in the future. First American CoreLogic made "very crude" estimates that the foreclosure rate will peak a bit higher than 4% in early 2010, he said.
More than 15.2 million U.S. mortgages, or 32.2% of all mortgaged properties, were in a negative-equity position on June 30, edging down from 32.5% at the end of March, according to the real-estate information company, which tracks data on about 90% of mortgage loans nationwide.
The aggregate property value for loans in a negative-equity position was $3.4 trillion, according to the report.
Negative equity can occur because of a decline in property value, an increase in mortgage debt or a combination of both. Equity levels are important to people who can't make their mortgage payment since it affects their ability to sell or refinance, said Mark Fleming, chief economist for First American CoreLogic.
The slight drop in the portion of underwater loans reflects the recent flattening of home price changes, which is "great news" for the housing market as negative equity has been increasing for a number of periods, Fleming said.
Still, he stressed that this decrease is a quarterly comparison, not the yearly comparison typically used in house prices.
Negative equity is a strong driver of foreclosures, Fleming said, and the stunted growth rate in the second quarter is a positive sign that foreclosures may moderate in the future. First American CoreLogic made "very crude" estimates that the foreclosure rate will peak a bit higher than 4% in early 2010, he said.
