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OUTLOOK continued
home starts won’t hit the million mark until 2016. Material shortages and price spikes have eased, but skilled labor and buildable land are scarce. The biggest hurdle continues to be access to credit, both for the builders and their buyers.
STILL SWIMMING AGAINST THE CURRENT
The number of U.S. homes somewhere in the foreclosure process fell in September to the lowest level since before the bust. But a lot of homeowners are still underwater, meaning that
they owe more on their mortgage than their home is worth and can’t put their houses up for sale without losing money. In the third quarter, 15% (5.4 million)
of all homes with a mortgage were underwater by at least 25%, down from one-fourth of all homes a year ago, according to RealtyTrac, which publishes data about distressed properties.
The options for underwater homeowners aren’t pretty. They may be able to refinance through the Home Affordable Refinance Program and hang on to their house. They could do a short sale, but they may face a tax bill
on the forgiven debt (unless Congress retroactively extends protective legislation that expired in 2013, which Kiplinger thinks it will).
Or they could bail out via foreclosure.
The states with the most underwater homeowners at the end of September were Nevada (almost one-third) and Florida, Illinois, Michigan and Rhode Island (about one-fourth). Says Daren Blomquist, vice-president of RealtyTrac, “The decrease in underwater properties is promising, but the floodwaters aren’t receding as
quickly as they were before.”
In the third quarter, 15% (5.4 million) of all homes with a mortgage were underwater by
at least 25%
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