Negative Equity Falls in Second Quarter, But National Home Values Continue to Decline

/PRNewswire/ -- Home values in the United States continued to decline in the second quarter of 2010, with the Zillow Home Value Index(1) falling 3.2 percent year-over-year and 0.6 percent from the first quarter to $182,500. The national rate of decline decelerated from the first quarter, marking the second consecutive quarter of slowing declines, and negative equity(2) fell to 21.5 percent, according to the second quarter Zillow Real Estate Market Reports(3).

Negative equity, which refers to the percentage of single-family homeowners with mortgages who are underwater, fell from 23.3 percent in the first quarter, and from 23 percent one year ago.

Conditions varied among individual markets across the country. In California, where both federal and state tax credits are available to some homebuyers, more than a quarter (27.8 percent) of markets tracked by Zillow saw increases in home values in the past year. Home values in five California markets have increased for the past five quarters, and four of those have increased by more than 5 percent since the second quarter of 2009. The Zillow Home Value Index was up 7.3 percent year-over-year in the San Diego metropolitan statistical area (MSA); up 5.9 percent in the San Francisco MSA; up 5.6 percent in the San Jose MSA; and up 5.5 percent in the Los Angeles MSA.

Meanwhile, home values in Florida and Arizona continued to show dramatic declines, with home values in the Miami-Fort Lauderdale MSA falling 15.2 percent year-over-year and home values in the Phoenix MSA falling 11.8 percent.

"As the national housing market limps toward stabilization, individual markets are a mixed bag," said Zillow Chief Economist Dr. Stan Humphries. "The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid - and likely unsustainable - rates of appreciation in many markets across the state. While there is some uncertainty about how home values will respond in those markets once all incentives are removed, it's certain they can't continue at their current rates of appreciation, but is unlikely they will re-test the low points reached in 2009.

"Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values. High supply continues to be a challenge in states like Florida and Arizona.

"Nationally, home values are moving in the right direction as rates of decline continue to slow. There is a large unknown on the horizon, however, as these second quarter numbers are still heavily influenced by the federal homebuyer tax credits, which were available for homes under contract by the end of April. Home sales are declining significantly in the post-tax credits environment, but the impact of falling home sales on already-declining home values is yet to be seen. Recent trends in home values suggest the nation could reach a bottom in the latter half of 2010, but we continue to be cautious about the impact of declining home sales."

Foreclosures(4) again reached a new peak in June, with more than one out of every 1,000 (0.11 percent) U.S. homes being foreclosed upon during the month.

Foreclosure re-sales(5) fell in June, making up 16.9 percent of all U.S. home sales during the month, down from a 2010 high of 19.8 percent in February. Foreclosure re-sales continued to be high in most markets hit hardest by value declines. For example, they made up 55.8 percent of June sales in the El Centro, Calif. MSA, 54.6 percent in the Madera, Calif. MSA and 53.6 percent in the Merced, Calif. MSA. Additionally, more than one-fourth (26 percent) of home sales nationwide sold for less than what the seller originally paid.

Metropolitan
        Statistical                Zillow Home Value Index
                                Areas
                                -----
                            June       QoQ       YoY     Change   Negative
                              2010   Change    Change     from    Equity*
                                                 ------     Peak      ----
                                                            ----
  United States           $182,460      -0.6%     -3.2%    -23.9%     21.5%
  Akron, OH               $117,213       0.4%     -2.7%    -14.1%     26.1%
  Albany, NY              $188,323       1.5%     -1.1%     -5.8%     10.7%
  Allentown, PA           $191,234      -0.3%     -1.7%    -16.0%     16.8%
  Anderson, SC             $99,300       1.5%      2.4%     -9.6%      n/a
  Ann Arbor, MI           $157,432      -1.2%    -10.6%    -32.2%     33.0%
  Atlanta, GA             $142,461      -1.9%     -6.0%    -22.2%     31.5%
  Atlantic City, NJ       $200,906      -0.3%     -5.0%    -27.2%     20.2%
  Augusta, GA             $107,414       1.1%     -6.4%     -8.3%     14.5%
  Bakersfield, CA         $136,554       1.9%     -1.4%    -50.5%     44.6%
  Baltimore, MD           $238,527      -1.1%     -5.1%    -19.2%     19.0%
  Bellingham, WA          $255,500       0.6%     -1.3%    -10.1%      n/a
  Bend, OR                $167,531      -2.7%    -21.8%    -52.6%     40.3%
  Boston, MA              $331,568       3.2%      3.4%    -16.8%      8.3%
  Boulder, CO             $312,583       2.1%     -0.4%     -1.9%      9.9%
  Bremerton, WA           $249,020      -1.0%     -4.3%    -19.0%     18.6%
  Canton, OH              $102,763      -0.2%     -1.7%    -13.6%     23.6%
  Cape Cod, MA            $318,026       0.4%     -2.8%    -22.7%      6.9%
  Champaign-Urbana, IL    $131,512       0.7%     -2.2%     -3.9%     11.1%
  Charleston, SC          $170,039       0.0%     -5.1%    -15.7%     22.0%
  Charlotte, NC           $148,985       0.1%     -4.0%    -10.4%     27.3%
  Chattanooga, TN         $126,967      -2.6%     -2.1%     -4.7%      n/a
  Chicago, IL             $196,987       1.6%     -4.4%    -27.2%     28.9%
  Chico, CA               $203,749       2.9%     -0.4%    -32.1%     24.7%
  Cleveland, OH           $119,716       1.5%     -1.3%    -16.4%     28.8%
  Cleveland, TN           $123,000       2.8%      0.5%     -6.0%      n/a
  Colorado Springs, CO    $189,793      -0.0%     -2.0%     -7.4%     28.4%
  Columbia, SC            $122,065       0.0%     -2.1%     -5.7%     17.3%
  Columbus, OH            $137,578      -0.3%     -2.8%     -8.4%     26.4%
  Corvallis, OR           $244,300       0.8%     -4.4%     -9.6%      n/a
  Cumberland, MD           $83,500      3.57%     2.10%      0.0%      n/a
  Dayton, OH              $102,713      -0.2%     -3.1%    -12.9%     22.6%
  Daytona Beach, FL       $108,300      -1.7%    -12.8%    -51.4%      n/a
  Denver, CO              $215,969       1.0%      2.5%     -7.4%     29.1%
  Des Moines, IA          $144,550       2.3%     -0.1%     -2.8%     18.6%
  Destin, FL              $159,290       0.3%     -3.8%    -37.3%     37.8%
  Detroit, MI              $87,147      -1.6%    -14.3%    -46.0%     31.4%
  Durham, NC              $180,886       2.3%      3.6%      0.0%      8.4%
  El Centro, CA           $112,086      -2.2%    -11.3%    -56.3%     57.5%
  Eugene, OR              $193,793      -1.8%     -6.3%    -16.8%     12.8%
  Fayetteville, NC        $114,036      -0.7%     -7.0%     -7.0%     11.5%
  Flagstaff, AZ           $254,385      -3.4%     -9.8%    -29.5%     19.9%
  Fort Collins, CO        $219,522       1.2%      1.2%     -3.1%     13.0%
  Fort Myers, FL          $120,479      -0.1%     -6.5%    -60.2%     51.9%
  Fresno, CA              $153,117      -0.4%     -4.7%    -47.8%     38.5%
  Gainesville, FL         $146,253       1.8%     -7.8%    -23.2%     22.6%
  Grand Junction, CO      $177,344      -4.2%    -12.6%    -20.8%     31.2%
  Grand Rapids, MI        $116,111      -0.6%     -0.4%    -18.3%     33.0%
  Green Bay, WI           $142,896       0.2%     -0.7%     -5.2%     15.7%
  Greensboro, NC          $125,125      -0.4%     -5.3%    -12.1%     11.7%
  Greenville, SC          $132,853       2.3%     -0.4%     -1.8%     11.6%
  Hanford, CA             $118,400       1.1%    -14.7%    -45.4%      n/a
  Hartford, CT            $224,393       2.2%      1.4%     -9.9%      8.3%
  Jackson, TN              $95,800       2.1%      0.7%     -3.4%      n/a
  Jacksonville, FL        $136,265      -3.2%    -10.7%    -34.6%     49.8%
  Jacksonville, NC        $140,700      -0.4%      0.5%     -0.5%      n/a
  Johnson City, TN        $110,100       2.6%     -3.6%    -14.3%      n/a
  Knoxville, TN           $134,741       1.7%     -4.4%     -6.3%      9.4%
  Lakeland, FL             $99,695      -5.3%    -13.9%    -47.1%     55.7%
  Lancaster, PA           $178,064       1.1%     -3.2%     -7.2%      8.0%
  Las Vegas, NV           $128,183      -0.4%    -12.4%    -58.1%     73.9%
  Lincoln, NE             $134,914      -0.4%     -0.1%     -5.5%     12.7%
  Little Rock, AR         $128,012       4.0%      4.4%      0.0%      9.6%
  Los Angeles, CA         $425,425       2.2%      5.5%    -29.7%     16.9%
  Madera, CA              $151,759       7.8%     -0.5%    -51.6%     38.4%
  Madison, WI             $203,332      -0.7%     -3.6%    -14.8%     12.2%
  Medford, OR             $179,433      -0.5%     -7.7%    -37.9%     37.4%
  Melbourne, FL           $112,654      -4.5%     -9.6%    -51.6%     43.0%
  Memphis, TN             $105,058      -0.7%     -4.2%    -14.3%     33.7%
  Merced, CA              $110,719       1.2%      1.4%    -67.9%     40.0%
  Miami-Fort
   Lauderdale, FL         $146,458      -6.6%    -15.2%    -52.4%     44.0%
  Milwaukee, WI           $178,517       1.9%     -6.0%    -13.0%     22.0%
  Minneapolis-St Paul,
   MN                     $185,783      -0.2%     -3.1%    -24.3%     36.6%
  Mobile, AL              $105,480      -4.1%    -11.7%    -20.2%     13.3%
  Modesto, CA             $146,391       2.2%      0.4%    -60.0%     57.5%
  Morristown, TN           $98,700       0.8%     -6.6%    -20.7%      n/a
  Mount Vernon, WA        $211,100      -2.7%    -13.4%    -23.4%      n/a
  Napa, CA                $360,562       0.9%     -5.1%    -41.1%     37.2%
  Naples, FL              $216,628       0.5%     -3.7%    -52.0%     38.5%
  Nashville, TN           $150,378      -1.6%     -6.2%     -9.6%     18.1%
  New Haven, CT           $231,106       2.1%      0.5%    -15.9%     10.5%
  New London, CT          $225,420       2.2%      1.8%    -13.1%     10.6%
  New York, NY            $363,239      -0.5%     -2.1%    -20.9%     13.5%
  Ocala, FL               $101,072      -4.1%    -15.2%    -42.8%     37.7%
  Oklahoma City, OK       $119,257       4.6%      5.0%      0.0%      6.1%
  Olympia, WA             $232,744       0.2%     -4.2%    -10.8%     20.8%
  Omaha, NE               $139,666      -4.8%     -7.0%     -8.2%     13.6%
  Orlando, FL             $124,483      -1.3%    -13.8%    -51.7%     64.6%
  Panama City, FL         $150,500      -0.3%     -4.9%    -42.5%     31.1%
  Pensacola, FL           $123,252      -2.2%     -3.7%    -24.5%     32.1%
  Philadelphia, PA        $208,639      -0.3%      0.0%    -11.0%     10.6%
  Phoenix, AZ             $137,113      -3.6%    -11.8%    -51.1%     66.8%
  Pittsburgh, PA          $107,164       1.1%     -2.8%     -5.1%      5.6%
  Pittsfield, MA          $194,900       2.5%      1.7%    -11.2%      n/a
  Port St. Lucie, FL      $111,812      -4.9%     -9.7%    -55.9%     55.0%
  Portland, OR            $230,165      -0.9%     -7.1%    -22.3%     22.6%
  Poughkeepsie, NY        $232,640      -2.2%     -8.6%    -26.1%     12.5%
  Prescott, AZ            $189,774      -1.7%     -6.7%    -38.6%     28.2%
  Providence, RI          $219,102      -1.2%     -4.3%    -28.0%      n/a
  Pueblo, CO              $108,010      -1.1%     -1.7%    -13.0%     29.3%
  Punta Gorda, FL         $121,989      -1.4%      1.4%    -48.2%     38.3%
  Raleigh, NC             $182,578       0.0%     -6.8%    -11.8%     20.1%
  Reading, PA             $163,441       0.9%      0.7%     -9.0%      9.4%
  Reno, NV                $181,576      -1.1%     -9.0%    -49.4%     61.9%
  Richmond, VA            $200,111       1.6%     -2.5%    -11.4%     17.4%
  Riverside, CA           $194,562       1.5%     -0.8%    -51.7%     49.0%
  Rochester, NY           $123,158       2.1%      2.8%      0.0%      9.3%
  Rockford, IL            $109,214       1.2%     -2.1%    -11.6%     16.3%
  Sacramento, CA          $234,655       1.0%     -2.0%    -43.2%     38.1%
  Salem, OR               $178,122       0.8%     -4.5%    -16.2%     20.4%
  Salinas, CA             $303,697      -0.1%      0.6%    -56.0%     33.6%
  Salisbury, MD           $143,900      -3.2%     -9.8%    -21.1%      n/a
  San Diego, CA           $378,798       2.9%      7.3%    -29.7%     20.4%
  San Francisco, CA       $528,861       2.0%      5.9%    -25.1%     19.6%
  San Jose, CA            $590,686       3.2%      5.6%    -20.7%     13.8%
  San Luis Obispo, CA     $400,845      -0.8%     -4.0%    -33.3%     17.7%
  Santa Barbara, CA       $449,368       1.0%      4.2%    -33.1%     22.9%
  Santa Cruz, CA          $507,115      -0.3%     -4.1%    -30.6%     16.9%
  Santa Rosa, CA          $374,313       3.6%      1.9%    -36.8%     15.8%
  Sarasota, FL            $150,175      -0.6%     -4.4%    -51.2%     45.4%
  Seattle, WA             $288,942      -1.3%     -5.9%    -24.3%     25.0%
  Spartanburg, SC         $105,521       0.6%     -2.7%     -2.9%     12.7%
  Spokane, WA             $158,933       1.4%     -2.6%    -15.5%     20.0%
  Springfield, OH          $91,800     -1.59%    -3.52%    -10.6%      n/a
  Springfield, MA         $190,256       0.7%     -2.3%    -12.0%      7.2%
  St. Louis, MO           $141,073       1.6%     -3.3%    -10.5%     18.3%
  Stamford, CT            $393,151       1.6%     -0.2%    -21.1%      9.6%
  Stockton, CA            $163,039       2.6%     -0.3%    -60.3%     53.5%
  Sumter, SC              $100,500       1.9%     -1.7%    -14.2%      n/a
  Tallahassee, FL         $149,118      -3.4%     -7.2%    -18.3%     32.9%
  Tampa, FL               $118,670      -0.1%     -8.2%    -45.1%     45.3%
  Toledo, OH               $93,489      -0.3%     -4.7%    -23.2%     26.5%
  Tucson, AZ              $160,341      -0.5%     -6.4%    -31.7%     41.4%
  Tulsa, OK               $117,135       0.9%      2.6%      0.0%      6.1%
  Utica, NY                $99,710       2.8%      1.7%     -5.0%      8.4%
  Vallejo, CA             $217,225       3.9%     -2.6%    -54.1%     49.7%
  Ventura, CA             $418,875       1.2%      3.7%    -33.3%     18.9%
  Vero Beach, FL          $121,439      -1.1%     -8.5%    -48.6%     42.5%
  Visalia, CA             $136,442      -1.7%     -6.7%    -44.1%     37.5%
  Washington, DC          $330,573       1.0%      1.8%    -24.2%     25.0%
  Winston-Salem, NC       $134,546       2.4%      1.6%     -2.9%     10.1%
  Worcester, MA           $214,437       1.2%     -0.8%    -24.6%     20.2%
  Yakima, WA              $137,586      -0.3%     -2.3%     -3.7%      7.2%
  York, PA                $154,688      -0.3%     -2.6%    -13.5%     15.1%
  Yuba City, CA           $153,200       1.4%     -5.2%    -51.3%      n/a
  Yuma, AZ                $124,500      -1.0%    -10.3%    -33.2%      n/a
  --------                --------      ----     -----     -----       ---
  *Negative equity refers to the percent of single-family
   homeowners with mortgages
  -------------------------------------------------------

(1) The Zillow Home Value Index is the median Zestimate valuation for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. The Home Value Index at the national level is calculated using a weighted average of the median home value for each county and includes data from 440 metropolitan statistical areas. It is expressed in dollars and is for a particular geographic region.

(2) Negative equity is calculated of all single-family homes with mortgages. Zillow began calculating negative equity with this methodology in the first quarter of 2009.

(3) The data in Zillow's Real Estate Market Reports is aggregated from public sources by a number of data providers for 124 Metropolitan Statistical Areas dating back to 1996. Mortgage and home loan data is typically recorded in each county and publicly available through a county recorder's office.

(4) Foreclosures are defined as a Trustee's Deed Upon Sale or equivalent transaction.

(5) Foreclosure re-sales capture mostly sales of bank-owned (REO) homes. It measures sales of homes that were foreclosed on in the previous 12 months.
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Fannie Mae Undertakes 'Making Home Affordable' Refinancing and Modification Initiatives

/PRNewswire-FirstCall/ -- Fannie Mae (NYSE:FNM) today began making two new initiatives -- Home Affordable Refinance and Home Affordable Modification -- available to its servicers and borrowers as part of the Obama Administration's Making Home Affordable program. The two initiatives are designed to significantly expand the numbers of borrowers who can refinance or modify their mortgages to a payment that is affordable now and into the future.

"Making Home Affordable provides crucial tools to mortgage lenders and homeowners coping with financial hardship and declining home prices," said Herb Allison, president and chief executive officer. "Potentially millions of homeowners could qualify for and benefit from these initiatives. The people of Fannie Mae will do all they can to make the program a success for homeowners across America and to advance the nation's housing recovery."

Home Affordable Refinance

Home Affordable Refinance includes new refinancing flexibilities for homeowners whose loans are owned by Fannie Mae. Key features include:

-- Additional Flexibilities: Most borrowers refinancing an existing
Fannie Mae loan will not be required to buy new or additional mortgage
insurance if the loan at the time of the refinance is more than 80
percent of a home's value. Any existing mortgage insurance may be
carried forward to the new loan. In addition, Fannie Mae can refinance
loans up to 105 percent of a home's value with this new flexibility,
so even borrowers who are "underwater" -- who owe more than their home
is worth -- may be able to refinance. This will expand the number of
borrowers able to take advantage of lower interest rates that reduce
monthly payments, or refinance into a more sustainable mortgage.
-- Streamlined Processing: Beginning in April, all 1,600 lenders and
29,000 mortgage brokers using Fannie Mae's Desktop Underwriter(R)
platform will be able to process an application to refinance any
existing Fannie Mae loan, allowing for greater lender origination
capacity and easier refinancing for borrowers.

What Borrowers Need to Know:

-- To qualify, your mortgage loan must be owned by Fannie Mae.
-- You must have a solid payment history on your existing mortgage.
-- The expanded refinance flexibility ends in June 2010.

Home Affordable Modification


Through the Home Affordable Modification, Fannie Mae will work with loan servicers across the country to help distressed borrowers modify their current loan into a mortgage that is more affordable and sustainable. Loan servicers participating in the program may reduce interest rates, lengthen the payment time frame or take other steps, such as principal forbearance, to bring the monthly payments down to as low as 31 percent of the borrower's gross (pre-tax) income.

What Borrowers Need to Know:

-- To modify a loan through Home Affordable Modification, it must be for
your primary residence.
-- You need not wait to become delinquent with your payments -- a plan
can be put in place as soon as you think you may have trouble making
your mortgage payment.
-- The amount you owe on your mortgage must be less than or equal to
$729,750.
-- The program is for mortgages originated prior to January 1, 2009.
-- Certain eligibility requirements, including attesting to a financial
hardship, may apply in some cases.



To ensure borrowers currently at risk of a foreclosure have the opportunity to apply for a Home Affordable Modification, Fannie Mae servicers have been directed not to proceed with a foreclosure until a borrower has been evaluated for the program.

Finding Out if a Loan is Owned by Fannie Mae

Borrowers can find out if their loan is owned by Fannie Mae in one of two ways:

-- Call your current mortgage lender or servicer. The phone number
should be on your monthly mortgage statement or monthly coupon book.
-- Contact Fannie Mae. Call 1-800-7FANNIE (8 a.m. - 8 p.m. ET) or visit
http://www.fanniemae.com/homeaffordable.

Fannie Mae also intends to make an online tool available later this month so borrowers can look up their loan and determine if it is owned by the company.

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