What is ENE ?? (effective negative equity)
'effective' negative equity,
is when borrowers/homeowners who have so little equity in their homes, they cannot afford to move.
Consider the following from mortgage
analyst Mark Hanson:
On US totals, if you figure average house
prices use conforming loan balances, then a repeat buyer has to
have roughly 10% down to buy in addition to the 6% Realtor fee to
sell. Thus, the effective negative equity target would be 85%.
You also have to factor in secondary financing, which most
measures leave out. Based on that, over 50% of all mortgaged
households in the US are effectively underwater — unable to
sell for enough to pay a Realtor and put a down payment on a new
purchase without coming out of pocket.
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Special thanks to:
Chris McLaughlin, who is widely known as America’s top
Real Estate Attorney and Investment Consultant.
