Negative Equity Means Arizona Homeowners Staying Put Longer
Arizona homeowners are staying in their current homes longer than they would in a healthy housing market. That’s one of the findings after new figures on negative equity were released Thursday by the housing data provider RealtyTrac.
RealtyTrac Vice President Daren Blomquist says 20 percent of homes with a mortgage in Arizona had negative equity in the first quarter, or their owners were seriously underwater.
But that’s down from 33 percent in the quarter last year. And Blomquist says National Association of Realtors stats show that has implications for the housing recovery.
“I think it has a chilling effect on a typical kind of churn in the market. People typically stay in their homes according to statistics out there from NAR, around six years," Blomquist said. "That’s now up to nine years because in large part of this negative equity situation.”
Blomquist says that leads to fewer first-time home buyers. He expects it to take three to five years to return to the zero negative equity situation that would signify a healthy housing market.
One benefactor, Blomquist said, is the rental housing market, because people who are unable to afford a first-time home purchase are staying in their rental properties longer than normal.