Source: Bloomberg
Low inventory may ease as more owners are able to sell, as the number of Americans who owe more on their mortgages than their homes are worth fell at the fastest pace on record in the third quarter with prices increasing. Owners are finding it easier to list properties and buy a new place because the share of owners with at least 20 percent equity climbed to 60.8 percent from 58.1 percent.
Making sense of the story
- As more people gain the equity they need to sell their house and have a down payment for the next one, home sales are expected to pick up.
- The pent-up demand created by the low inventory is evident in the fact that the number of homes for sale reached a low of 1.8 million in early 2013, which was the fewest in more than a decade.
- As the real estate market recovers, furniture sales and renovations will add to consumer spending, as homeowners build equity and opt to sell their homes.
- According to Zillow, 10.8 million homeowners were underwater on their mortgages in the third quarter, down from 12.2 million in the second quarter.
- There are about 20 million people who had negative equity or less than 20 percent equity, down from 21.5 million in the prior three months.
- The median price of an existing home rose 12.8 percent last month. In August, it increased 13.4 percent, which was the fastest rate since the height of the real estate boom in 2005.