Underwater mortgages on decline locally
The number of homeowners in the San Antonio-New Braunfels area who owe more on their mortgages than their homes are worth — known as being “underwater” — has steadily declined since the beginning of 2010.
According to a 2011 first-quarter report from real estate data firm CoreLogic, 9.2 percent of area residential properties with a mortgage were underwater. That’s 30,837 borrowers in all, a drop from the first quarter of 2010, when 34,218 borrowers, or 10.4 percent of area properties, were underwater.
An additional 18,914 area borrowers were in near negative equity — within 5 percent of becoming underwater — during the first quarter of 2011. That’s down 5.2 percent from 19,958 borrowers in the first quarter of last year.
“I think for the rest of this year and the first half of next year, the national numbers won’t be much better,” said James Gaines, an economist with the Real Estate Center at Texas A&M. “But for Texas and for San Antonio, I’d expect to see these numbers start to slowly improve.”
San Antonio’s numbers are rosy compared with national figures: 22.7 percent of properties across the country were underwater at the end of the first quarter of 2011. At the far end of the spectrum, in Las Vegas, 66 percent of properties were underwater.
In Texas, 10.1 percent of properties were underwater, down from 11.8 percent in the first quarter of 2010.
“We didn’t use, in San Antonio or throughout Texas, as much of the exotic financing during the housing boom,” Gaines said. Nor has Texas seen the steep decline in home values other states have experienced, he added.
The state also benefited from its stringent requirements on home-equity financing. Borrowers in Texas can’t take out home equity loans larger than 80 percent of the value of their homes. “Having that limit on there kept people from getting overextended,” Gaines said.
According to CoreLogic, more than 40 percent of underwater borrowers have home equity loans.
The declining number of underwater properties is “a further indication,” Gaines said, “of how Texas avoided some of the hardships and some of the dramatic impacts being faced in other parts of the country.”
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Tags: Decline, Decline Locally
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