Mortgage Difficulty Rates High, But Decreasing

April 4, 2011

This article is included in these additional categories:

Analytics, Automated & MarTech | Data-driven | Financial Services | Household Income | Real Estate | Uncategorized

harris-mortgage-payments-by-americans-apr11.gifA new Harris Poll finds that fully 22% of people with mortgages are having difficulty meeting their mortgage payments, including 7% who are having “a great deal of difficulty”. Furthermore, 21% of those with mortgages are “underwater” in that they think their homes are worth less than the amounts that they owe.

Numbers Improve from 2010

harris-mortgage-underwater-apr-2011.JPGHowever these numbers are somewhat lower than they were in March 2010. Those having difficulty paying off their mortgages have declined 24%, from 29% to 22%. Those having a great deal of difficulty are down 36%, from 11% to 7%. Furthermore, at this time last year, 24% of those with mortgages thought they were underwater, 12.5% higher than the number now.

Middle Class Most Likely to Be Underwater

Looking at income demographics among homeowners who say they are underwater, the highest percentage (27%) is found among what could be considered lower middle class homeowners with an annual household income of $35,000 to $49,999. The next-highest percentage (24%) is found among middle class homeowners one income level higher (24%).

Interestingly, the poorest homeowners earning less than $35,000 annually have a lower underwater rate on their mortgages (22%) than these wealthier homeowners. More expectedly, the wealthiest homeowners with annual household income of $100,000 or more also have the lowest underwater mortgage rate (18%).

The percentage of homeowners who say their home is worth more than their remaining mortgage debt climbed close to 4% from 2010, rising from 55% to 57% this year.

Fewer Homeowners Paying Off Mortgage

harris-mortgage-how-many-have-apr-2011.JPGThere has been a slight year-over-year decline in the percentage of the 72% of US adults who are homeowners who are currently paying off a mortgage. This figure was 69% in 2010, but dropped 4% to 66% in 2011. A 10% increase in the percentage of homeowners who say they have paid off their mortgage (from 20% to 22%) likely drove this decrease.

6 in 10 Have Expense Concerns

harris-mortgage-income-concern-apr-2011.JPGMoving from mortgage expenses to general expenses, Harris data finds that about six in 10 (62%) US adults are concerned about their family income covering all expenses and costs this year. That figure is down almost 5% from 65% last year.

The level of concern directly slides downward with each increase in level of annual household income. Those with annual household income of less than $35,000 have the highest rate of concern (71%), while the rate of concern among those with annual household income of $100,00 or more have a rate of concern about 41% lower (42%).

Zillow: US Home Values Keep Falling

US homes were expected to lose more than $1.7 trillion in value during 2010, according to recent estimates from online real estate marketplace Zillow.com. This $1.7 trillion estimate represents a 63% increase from the $1 trillion in value lost by the US housing market during 2009. In addition, it would bring the total value lost by US homes since the market peaked at $31.7 trillion in June 2006 to $9 trillion. The expected total value of the US housing market at the end of 2010 will be $22.7 trillion, down 5% year-over-year and about 28% lower than its peak value.

About the Data: This Harris Poll was conducted online within the US between March 7 to 14, 2011 among 2,379 adults (aged 18 and older). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

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