Fewer US homeowners with negative equity in Q2

[BOSTON] The number of Americans who owe more on their mortgages than their homes are worth fell at the fastest pace on record in the third quarter as prices rose, a sign that supply shortages may ease as more owners are able to sell.

The percentage of homes with mortgages that had negative equity fell to 21 per cent from 23.8 per cent in the second quarter, according to a report yesterday from Seattle-based Zillow Inc. The share of owners with at least 20 per cent equity climbed to 60.8 per cent from 58.1 per cent, making it easier for them to list properties and buy a new place.

"Home sales will pick up very nicely when people gain the equity they need to sell their house and have a downpayment for the next one," said Neal Soss, chief economist at Credit Suisse Group AG in New York. "There's a magnifying effect on sales - people are able to list their home and sell it, and odds are they're going to go on and buy another one."