Underwater Mortgages Drag on U.S. Housing Recovery

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May 21 (Bloomberg) -- Zillow Chief Economist Stan Humphries discusses U.S. housing and the impact of underwater mortgages on the economy. Barbara Corcoran Ventures Partners Founder Barbara Corcoran on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)

Understanding negative equity is a huge part of understanding the housing market.

It is serving to constrain existing home sales.

It also helps to understand why first-time homebuyers have been participating in the market at lower levels than they have historically because the most affordable homes they are looking at have most likely been underwater.

Barbara corcoran, you're getting briefed by stan humphries.

My question to you is, really, how much influence does it have on the market when you compare that to the overbidding going on in every city in the nation?

Plus fewer homes to choose from, how much does that weight?

My feeling is it does not weigh in at all.

How do you feel?

The current housing recovery is a witch's of a few different factors.

An enormous set of prices with very low mortgage right and equity that constrains inventory, a lot more buyers because of his low prices and interest rates, creating enormous price spikes.

Let me tell you something, the best thing for the real estate market right now are these price hikes we have been dreaming about.

I would like you to take that bad news, sit on it, never mention it again.

You will make people think of there is something wrong with the housing market.

If there is anything whether -- where there is a firm like that -- be quiet.

The concern is that these conditions are far from normal.

We are certainly looking for a balance out on the bottom.

How about celebrating?

Fax positive appreciation has driven down negative equity.

2.5 years ago it was one, now it is below 19. the concern is that i think people think that the unpleasantness of the housing recession has passed, but it was enormously hard, left deep scars, and it will take a few years.

You know what i think?

Negative equity is a nice and failed late in people who cannot afford it day-to-day.

I want to get your take on fannie mae and freddie mac.

Larry fink said at a conference yesterday that the u.s. housing market is structurally unsound.

More unsound than it was before the financial crisis.

You are a member of the fannie mae affordable housing council.

What do you think of their stance?

I am quite concerned about reform and trying to get back on better footing.

We are under conservatorship we need stable footing with private capital in front of it.

The clarion call is the boom in rental housing.

Nationally, is that the trend we are going to see?


We are extraordinarily bullish on multifamily rental markets.

The consumers out there are as well, and they are being snapped up faster than hotcakes.

To go from the national to new york is extraordinary.

Very different.

That is what i want to get to.

My morning must reads -- here it is, the data that samuel miller uses to show that all manhattan cash home sales were 45% of all residential sales and cash sales for -- comprising 33% of transactions and mark, where is the money coming from?


International investors, good old american startups.

This is extremely important -- how much cast of you seem in a suitcase?

Honest to god?

Three or four deals over a lifespan of my career.

Not a lot.

But everybody pays with cash.

Literally it is suitcase?

Three times i had a suitcase.

I looked good.

This text has been automatically generated. It may not be 100% accurate.


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