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Local share of underwater homes drops

Rising home prices over the last few years are assisting homeowners in recouping lost equity. According to a report by real estate analytics firm Zillow, 12 percent of Mecklenburg County homeowners with outstanding mortgages in the fourth quarter of 2015 owed more on their homes than they were worth. That’s a big improvement from a year earlier, when 17 percent of mortgages were underwater.

Nationally, more than 6 million homeowners were underwater in the latest quarter, down from a peak of nearly 16 million in early 2012. Across the U.S., 13.1 percent of homeowners with mortgages were underwater, down from 16.9 percent in the fourth quarter of 2015.

Zillow said home values have been on the rise for 43 consecutive months, greatly contributing to the steady decline in negative equity. Moreover, the pace of growth has picked up lately, growing at a rate equal to or higher than the prior month’s rate in each of the past 10 months.

In the Charlotte area, home prices have been rising on limited supply, with the average sales price in February rising 4.2 percent from a year earlier to $230,943. According to the Charlotte Regional Realtor Association, the median sales price grew at a slower pace, increasing 2.2 percent to $182,000 in the same period.

Charlotte was one of the 18 largest markets that had a negative equity rate lower than the national average. Seventeen of the 35 markets had a higher rate.

Zillow reported that negative-equity hotspots remain concentrated largely in the Southwest and Midwest. Of the 35 largest metros covered by the company, negative equity rates were highest in Las Vegas, at 20.9 percent; Chicago, at 20.5 percent; and Atlanta, at 17.6 percent.

Large markets where negative equity rates were the lowest in the fourth quarter include Denver, at 5.5 percent; San Francisco, at 4.4 percent; and San Jose, California, at 2.8 percent.

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