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Fewer South Florida homes are 'underwater' compared to 2014

A major factor in the U.S. foreclosure crisis was homeowners owing more on their mortgages than their houses were worth. This is known as being “underwater” on your mortgage, and it forced numerous Florida homeowners to lose their houses in recent years. Underwater homes are very difficult to sell, often forcing people to walk away and accept foreclosure instead.

As the crisis continues to slowly recede in South Florida, another positive sign is that the number of underwater properties in the region is going down. According to the South Florida Sun-Sentinel, there were 322,701 homeowners in Palm Beach, Broward and Miami-Dade counties in the third quarter of the year who owed at least 25 percent more on their mortgage than their homes’ market value.

That’s a lot of underwater homes, but it is a significant improvement from the same time period in 2014, when 396,272 houses were at least 25 percent underwater.

Many underwater homeowners bought or refinanced their homes during the housing bubble of the mid-2000s, just before the bubble burst. As the housing market has recovered, equity has returned to many of these properties, bringing house values back to or near their rates before the crisis. Reportedly, 298,555 South Florida homeowners have at least 50 percent equity, up slightly from this time in 2014.

Getting above water will allow homeowners stuck in their properties to sell, increasing the housing stock in the region. Hopefully, it will also contribute to the trend of foreclosure continuing to drop in South Florida.

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