American homeowners stand to lose more than a combined $2 trillion in home equity by year-end, according to a report released today by Zillow.
The real estate information company calculated that home prices have fallen 8.4 percent nationally year-over-year during the first three quarters of the year, placing millions underwater in the process.
It is now estimated that 11.7 million American households owe more on their mortgages than the current value of their homes, making it difficult for many to find any relief, low interest rates or not.
The worst losses over the past three quarters have been seen in inland areas of California, namely the cities of Stockton, Merced, and Modesto.
During that time, the average home price has slipped 32.3 percent to $210,179 in Stockton, 31.2 percent to $167,282 in Merced, and 30.4 percent to $197,368 in Modesto.
And things aren’t expected to get any better, with the final three months of the year likely to mark the eighth consecutive quarter of home price declines, according to Stan Humphries, Zillow’s vice president of data and analytics.
He also noted that default rates tied to stated income loans and option arms have yet to peak, and could exacerbate the foreclosure situation, and ultimately drive home prices even lower.
Amazingly, there are some winners out there, with home prices in Jacksonville, NC, Winston-Salem, NC, and Anderson, South Carolina all up marginally through the first three quarters of the year.
