"Thanks to rising prices and equity levels, about 4 million owners around the country last year were able to climb out of the financial tar pit of the housing bust — negative equity.
Negative equity gums up people's lives and the real estate marketplace as a whole. It makes it difficult or impossible for many owners to refinance out of a higher-cost mortgage into a more affordable one. It makes it painful to sell — you've got to bring cash to the table to pay off what you still owe to the bank. Plus almost no one wants to lend you money, at least not at reasonable interest rates secured by your real estate, when you're deeply underwater. So you're likely to spend less and invest less, and you're probably not going to buy another house. Nor will potential new buyers be able to purchase yours.
So when 4 million owners manage to transition out of negative equity into positive territory, that's significant news not just for them personally, but for the economy overall."
Read more: http://www.latimes.com/business/realestate/la-fi-harney-20140316,0,7849455.story
Quoted from The L.A. Times
Negative equity gums up people's lives and the real estate marketplace as a whole. It makes it difficult or impossible for many owners to refinance out of a higher-cost mortgage into a more affordable one. It makes it painful to sell — you've got to bring cash to the table to pay off what you still owe to the bank. Plus almost no one wants to lend you money, at least not at reasonable interest rates secured by your real estate, when you're deeply underwater. So you're likely to spend less and invest less, and you're probably not going to buy another house. Nor will potential new buyers be able to purchase yours.
So when 4 million owners manage to transition out of negative equity into positive territory, that's significant news not just for them personally, but for the economy overall."
Read more: http://www.latimes.com/business/realestate/la-fi-harney-20140316,0,7849455.story
Quoted from The L.A. Times
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