20 million American homeowners own their homes outright. No mortgage.

Homeowners With No Mortgage Offer Clues to Recovery
Excerpt:

As federal regulators and banks argue over whether new lending standards will make mortgage credit too tight or too expensive, one important fact about the housing market goes largely overlooked: More than 20 million American homeowners own their homes outright. No mortgage.

This represents just about one third of all homeowners nationwide, according to a new report from Zillow, a real estate information, sales and mortgage website.

Demographics, home prices and geographical location all seem to play into "free-and-clear" home ownership, according to Zillow's survey.

Out of the nation's top 30 housing markets, Pittsburgh, Tampa, New York, Cleveland and Miami had the highest percentage of free-and-clear homeowners. A high number of all-cash, foreign buyers probably plays into New York and Miami. The other cities have relatively low home values, compared to the rest of the nation, making it easier for homeowners to either buy their homes outright or pay off their mortgages more quickly. ([See "free and clear" heatmap in the article].)

Washington, D.C., Atlanta, Las Vegas, Denver and Charlotte had the lowest percentage of homeowners with no mortgage. Las Vegas, hard hit by the housing crash, saw many of its homes go to foreclosure and those homes then go to all-cash investors.

Comment: All of my wife's siblings, one of my siblings and my mother all are "free and clear". One sibling is free and clear on two homes. Another of my siblings will be free and clear within the next six months. Image source is screenshot

Twin Cities home prices tank

Twin Cities home prices fall 9 percent during March

Excerpt:

House price declines in the Twin Cities during March outpaced the nation, with foreclosures leading the decline.

CoreLogic's March Home Price Index (HPI) shows that home prices, including distressed sales, in the US fell for the eighth month in a row, down 7.5 percent compared to March 2010. Prices during February were down 5.8 percent compared with February 2010.

In the Twin Cities March prices fell by almost 9 percent, compared to last March, following last months 8 percent decline.

46% have negative equity in home

Excerpt:

In the Twin Cities, 46.2 percent of single-family homeowners owe more on the mortgage than the home is worth, according to the latest report from Zillow.com. That's up from 42 percent at the end of last year and 38.7 percent a year ago.

Nationally, negative equity reached a new high with 28.4 percent of all single-family homes with mortgages underwater, up from 27 percent in the fourth quarter.

"Home value declines are currently equal to those we experienced during the darkest days of the housing recession," said Stan Humphries, Zillow's chief economist, in a statement.

The median home price fell to $159,000 in the metro area in March, down 4.8 percent in the first quarter and 15.1 percent compared to last March, according to Zillow. The declines outpaced the nation, which saw prices fall 3 percent in the quarter and 8.2 percent compared to a year ago.

The real estate research firm now predicts home prices won't hit bottom until 2012 at the earliest. Previously, Zillow had expected a bottom in home values this year. Then Zillow expects a long period of below-normal real estate appreciation.

Comment: My house ... paid for! .... now valued at 2001 level .... oh well ... not selling anyway.

Chart of the Day: inflation-adjusted median price of a single-family home in the United States over the past 41 years

Inflation-adjusted median price of a single-family home in the United States over the past 41 years

Excerpt:

For some perspective on the all-important US real estate market, today's chart illustrates the inflation-adjusted median price of a single-family home in the United States over the past 41 years. Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased -- increased. That brings us to today's chart which illustrates how the inflation-adjusted median home price is currently 38% off its 2005 peak. That's a $100,000 drop. In fact, a home buyer who bought the median priced single-family home at the 1979 peak has actually seen that home lose value (8.5% loss). Not an impressive performance considering that more than three decades have passed. It is worth noting that the median priced home is currently in the bottom half of a price range that existed from the late 1970s into the mid-1990s.

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Homes now undervalued?

U.S. homes now undervalued, economists say: Prices fall in 241 metro areas in third quarter, and are likely to fall further

Excerpt:

Compared with their long-term fundamental values, U.S. homes are now 3.8% undervalued, the economists said.

"With no end in sight to the downward spiral of house prices, it is likely that the long-anticipated market correction will now overshoot fundamental valuations on the downside," said James Diffley, head of regional economics at Global Insight.
"Weak economic conditions and wary consumers continue to hold the housing market back," said Jeannine Cataldi, senior economist in charge of Global Insight's regional real estate analysis. "Although many areas are seeing home sales increase, it is largely due to foreclosure homes being snapped up at significantly discounted prices. As the inventory of these homes is removed from the market, prices will remain on a downward path."

However, another economist said home prices are still too high in many bubble areas.

Comment: They are still falling in Minneapolis and her suburbs. (But property taxes are going up! ???)