Price Correction in Housing Market May Catch Recent Buyers Underwater

A report released December 5 from analytics firm Black Knight, found that 5% of mortgages originated in 2022 are now marginally underwater and 20% are in low equity positions. However, the large equity cushions of mortgages originated prior to 2022 may limit the equity risk to recent buyers who purchased at the height of the market. Going forward, price corrections may be softened due to lack of inventory, with October’s for-sale listings running 19% below pre-pandemic levels.

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