According to Black Knight's latest Mortgage Monitor, 8% of all homes purchased with a mortgage in 2022 are now at least marginally underwater and nearly 40% have less than 10% equity stakes in their home, a situation most concentrated among FHA/VA loans. Over 25% of those FHA/VA purchase mortgage holders have negative equity, with 80% having less than 10% equity. In addition, Black Kinight said that while home prices continued to pull back in October, the month's 0.43% decline (a seasonally adjusted 0.13% decrease) was the smallest seen since prices peaked in June.
"Though the home price correction has slowed, it has still exposed a meaningful pocket of equity risk. Make no mistake: negative equity rates continue to run far below historical averages, but a clear bifurcation of risk has emerged between mortgaged homes purchased relatively recently versus those bought early in or before the pandemic. Risk among earlier purchases is essentially nonexistent given the large equity cushions these mortgage holders are sitting on..." Said Ben Graboske, President of Black Knight Data & Analytics.
Click here to read the full report at Black Knight.
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