Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

 - Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

Chicago Underwater Mortgages Over Twice National Average

Chicago Underwater Mortgages Over Twice National Average

In this post, we discuss a recent report that stated that the number of people with underwater mortgages in Chicago is twice the national average.

The inventory of homes in Chicago and the Chicagoland area has been fairly low for the past several years.

The Chicago area has been slower to recover from the real estate market crash than the rest of the nation.

There have been a few reasons for this.

One of the biggest problems for homeowners in Chicago though has been that so many people have so little equity in their homes that they can’t afford to sell them.


Chicago Underwater Mortgage Rate

At the end of the 2019 second quarter, a little over 7.8% of Chicago-area homeowners had a mortgage had negative equity.

This is according to a property information report from CoreLogic.

The same report stated that the national negative equity rate had dropped to 3.8 percent during the second quarter.

The only major city with a higher negative equity rate is Miami.

Chicago did, however, still beat out Miami for the highest number of underwater homes with a little more than 104,000.

This is more homes than New York City and Los Angeles combined, which totaled just under 97,000 between the two of them.

Another 1.6% of Chicago-area homeowners were in the “near negative equity” range, meaning their home has equity of under 5 percent.


What this means for Chicago homeowners

Equity that small often discourages homeowners from selling because they won’t end up with enough to buy a move-up home after paying commissions and other sale expenses.

First Time Home Buyer Mortgage WorkshopThe total of underwater mortgages and near negative equity homeowners is 9.4%.

That comes out to almost 125,000 homeowners that are stuck in their home without enough equity to sell.

Still, that is actually an improvement.

In 2018, there were 141,200 Chicago-area homeowners who couldn’t afford to sell.


What’s holding back the market

There have been several factors holding back the Chicago real estate market, including economic uncertainty and high property taxes.

Property tax bills Kane & DuPage CountyThere has been a comparatively slow revival of the Chicago area economy after the mid-2000s economic recession.

Even though the real estate market has slowed, property taxes have continued to rise.

Many homeowners are also wary of even more tax increases on the horizon.

Illinois and Chicago have both experienced a loss of population for the past five years, and that has led to reduced demand for homes as well.


Home prices in the Chicago area have continued to climb, however, they continue to recover at a slower rate than the rest of the country.


Source: Chicago way ahead of U.S.—in those who can’t afford to sell their home – Crain’s Chicago Business

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The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090