The increasing home prices have left fewer homeowners owning more money than the value of their properties. This allowed them to offer their homes on the market to the delight of buyers who were frustrated by the bidding wars. As more homes are being offered, the price increases are expected to slow down.
House prices have surged and led to more inventory on the market. At the end of March, 19.8 percent of the mortgaged homes in the US were underwater, which was down from 23.7 percent the previous year and 25 percent during 2011. Gains were experienced throughout the nation but regions that rose high and dropped hard remained burdened with homeowners who purchased their properties near the peak.
Nevada led the nation with the most mortgages underwater at 45.4 percent. It was followed by Florida at 38.1 percent. Michigan got 32 percent. Arizona was at fourth with 31.4 percent. Montana got the lowest mortgages underwater at 5.6 percent.
Among metropolitan regions, Tampa Bay got the highest percentage of mortgages underwater at 41.1 percent. It was followed by Miami at 40.7 percent. Dallas has the lowest percentage of mortgaged homes underwater with 8.3 percent.
At 19.4 percent, San Diego was better than the national average as well as California’s 21.3 percent. The region’s average home sale price was $406,500 in May, which was up 21.3 percent from the previous year.
Home inventories have remained low. In May, there was a 5.2 month supply for existing homes. California got a 2.6 month supply, which was lower than the 3.6 month supply the previous year. Six month supply is considered a balanced market.
In Southern California, almost one of every three homes is paid for in cash. This placed borrowers at a disadvantage. There were buyers who would write sellers about how they would take care of the home in the hopes of getting a personal connection.