Nearly five years after the end of the financial crisis and even as home values continue to rise, many American homeowners still owe more on their mortgages than their homes are worth.
About 16.3 percent of Charlotte homes with a mortgage were in negative equity in the fourth quarter of 2014, according to a report released Friday from online real estate marketplace Zillow. Charlotte’s negative equity rate improved 2 percentage points from the prior quarter and was slightly better than the national rate of 16.9 percent.
At the peak of the financial crisis, more than 15 million homeowners in the U.S. were underwater on their mortgages, and foreclosures, short sales and fast property appreciation helped alleviate negative equity for nearly half of homeowners.
Property values keep going up nationwide, but low-end homes – those in the bottom third of home values in their market and the most likely to be underwater – are losing value, Zillow said in the report. Among Charlotte’s low-end homes, 25.9 percent were in negative equity territory, compared with 27.3 percent nationwide.
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“Negative equity is decidedly not an equal opportunity predator, and looms larger over the bottom 10 percent of homes, where homeowners are least prepared to withstand the assault,” Stan Humphries, Zillow’s chief economist, said in a statement.
Nationally, negative equity worsened in 21 of the top 50 U.S. markets in the fourth quarter, Zillow found. Among the biggest metro areas, Virginia Beach, Va., and Jacksonville, Fla., had the highest negative equity rates at 28.3 percent and 27 percent, respectively.
In Atlanta, nearly half of all low-end homes were in negative equity. The city’s overall negative equity rate was 26.1 percent, one of the lowest in the country.
Zillow calculates that home values in Charlotte rose 5.5 year-over-year, while nationwide they rose 5.9 percent.