Ten million American families reside in homes worth less than the amount of the mortgages due on the homes. The large number of homes underwater in the United States still has a negative effect on the American economy. This is seven years after the great recession in the United States caused the collapse of the real estate market.
Although ten million Americans owe more on their property than their homes are worth, this is still an improvement from 2013.
Underwater Homes On Long Island
Long Island is fortunate that a smaller portion of the homeowners’ homes in Nassau and Suffolk Counties are underwater than the national average. Approximately 9% of the homeowners on Long Island, approximately 48,000 homes, are worth less than the amounts of their mortgages.
The actual figure of homes which are worth less than their mortgages on Long Island, is substantially higher. When taking into consideration the homeowners who have equity in their homes, it must be noted that for many of these homeowners, if they were to sell their homes, the proceeds from selling their homes would be too low to cover the costs and expenses involved in the sale of the home.
Fewer Homes Being Placed On The Market
The fact that homeowners can’t place their homes on the market and cover the expenses of paying the mortgage and the real estate transaction, is causing homeowners to keep their homes out of the marketplace. This has a negative impact on economic growth. A shortage of homes being listed in some areas has actually resulted in the homes which are on the market having inflated prices. This tends to prevent first time homeowners from coming into the marketplace due to their inability to meet the cost of these new homes.
Stan Humphries, the Chief Economist for Zillow, recently stated “the unfortunate reality is the housing markets look to be swimming with underwater borrowers for years to come.”
Hopefully the economy on Long Island and the rest of the United States will continue to improve which will raise the incomes of Americans and put more value into their homes.
Elliot S. Schlissel is a foreclosure lawyer. He defends foreclosure lawsuits brought by financial institutions against homeowners and assists homeowners in obtaining mortgage modifications.
