More Chicago homes underwater in last 3 months of 2012
BY FRANCINE KNOWLES Business Reporter email@example.com February 21, 2013 1:14AM
Updated: March 22, 2013 10:32AM
Nearly 37 percent of homeowners with mortgages in the Chicago area had negative equity in the fourth quarter of 2012, edging up from the third quarter, according to a new report that forecasts conditions will be worse by the end of the year.
The report, released Thursday by Zillow Inc. found that 36.9 percent of homeowners with mortgages in the metropolitan area in the fourth quarter last year were underwater, or upside down on their mortgages, meaning they owed more on their mortgages than their homes were worth. That was up from 36.6 percent in the third quarter, but down from 39.2 percent in the fourth quarter of 2011.
Zillow expects the percent of homes with negative equity will rise to 37.3 by the end of this year.
“Our forecast shows that Chicago’s negative equity rate is expected to rise because home values are expected to decrease by 0.6 percent” in the metropolitan area in December 2013, Zillow senior economist Svenja Gudell said in an email.
Zillow also noted the 90-day delinquency rate for all mortgaged homes is 12 percent in the Chicago area. That is above the national rate of 8.9 percent.
As of the end of the fourth quarter last year, 644,507 homes in the Chicago area had negative equity, and the cumulative amount of negative equity was $51.1 billion, Zillow said.
The report showed 41,208 homes were freed from negative equity in the area last year.
Nationally, the percent of homeowners with negative equity dropped to 27.5 at the end of the fourth quarter from 31.1 a year earlier.
Approximately 13.8 million U.S. homeowners were underwater on their mortgages at the end of the fourth quarter. Collectively, they were underwater by more than $1 trillion.
Zillow forecasts the percent of homeowners with underwater mortgages nationally will to fall to 25.5 percent by the fourth quarter of this year.