‘Underwater’ mortgage rate falls to 3.9% in Portland area, report says
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on September 25, 2014 at 12:02 PM, updated September 25, 2014 at 3:08 PM
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The number of homes worth less than their mortgage continues to fall as home prices rise, according to the data firm CoreLogic.
In the Portland-Vancouver-Hillsboro area, the number of “underwater” homes fell to 18,700 in the year’s second quarter, CoreLogic reported Thursday. That represents about 3.9 percent of all mortgaged homes in the region.
Another 1.9 percent are only barely above water (less than 5 percent equity), which for homeowners can be effectively the same barrier to selling or refinancing as being underwater.
Most foreclosures start with an underwater mortgage. If a homeowner, for whatever reason, can no longer afford their mortgage payments, the underwater mortgage will keep them from selling unless their bank agrees to write off the lost value of the home.
Although fewer homeowners are newly defaulting on their loans, underwater and near-underwater mortgages are still weighing on the housing market. Without enough equity to cover transaction costs and perhaps a downpayment on another home, homeowners are effectively blocked from moving.
In the year’s first quarter, CoreLogic reported about 25,000 Portland-area properties were underwater, representing 5.2 percent of mortgaged hom