In its quarterly report on negative home equity across the nation, online real estate hub Zillow (NASDAQ: Z) focused on a modest recovery seen in the number of underwater homeowners, which has fallen from 30.9% to 28.2% over the last quarter.
This marks the second largest drop in negative equity since the first quarter of 2011, when Zillow changed its negative equity metrics.
On the broader housing horizon, however, Zillow pointed to the danger of the fiscal cliff ahead and the potential impact on economic recovery.
“The housing market has found real momentum of its own, but is not immune from shocks to the broader economy,” said Zillow Chief Economist Dr. Stan Humphries. “If negotiations centered on resolving the fiscal cliff don’t inspire confidence in investors and consumers alike, recent home value gains – and, as a result, falling negative equity rates – could stall.”
The number of those who are underwater on their mortgages now hovers slightly above 14 million, according to Zillow data, down from 15.3 million in the second quarter.
The largest comebacks regionally were in Phoenix, Las Vegas, Denver, Sacramento and Orlando metro areas.
Written by Elizabeth Ecker