According to data vendor Attom, there remains 5.5 million homes that are seriously underwater (slightly less than 10%). On the other hand, there 13.7 million homes that are “equity rich” (around 24% of homes).
Equity rich is defined as the combined loan amount secured by the property is 50 percent or less than the estimated market value of the property. Seriously underwater is defined as the combined loan amount secured by the property was at least 25 percent higher than the property’s estimated market value.
One culprit is limited for-sale inventory. This chart is from Zillow:
The other culprit is The Federal Reserve, who have kept rate depressed for around 10 years.
Yes, limited for-sale housing inventory and Fed-depresssed interest rates for 10 years is helping some but not others.
Now, take a wild quess which states are “equity rich?” If you guessed California and New York, you were correct!!
Yes, housing is getting progressively more unaffordable to many households as limited for-sale inventory and insanely low monetary policy have effectively jailed (locked-out) many households from owning a home in California and New York.
“Please Chairman Yellen! Stop driving up home prices with your super-low interest rates when for-sale inventory is so low.”