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Number of Seriously Underwater Homes Hits New Low

Phil Hall
Feb 09, 2017
Homeowners with mortgages on their residences saw their equity increase by 5.6 percent year-over-year during the first quarter, according to data from CoreLogic

What a difference a year makes: New data from ATTOM Data Solutions has determined there were 5.4 million residential properties seriously underwater—where the combined loan amount secured by the property was at least 25 percent higher than the property’s estimated market value—at the end of 2016, a decline of more than one million properties from 2015. This sector of the housing market represented 9.6 percent of all U.S. properties with a mortgage—down from 10.8 percent at the end of the third quarter, down from 11.5 percent at the end of 2015, and the lowest level recorded by ATTOM Data Solutions since it began tracking this subject five years ago.
 
But as the volume of seriously underwater properties evaporated, the number of equity rich homes increased. ATTOM Data Solutions reported there were 13.9 million equity rich properties—where the combined loan amount secured by the property was 50 percent or less of the property’s estimated market value—at the end of 2016, nearly 1.3 million more than at the end of 2015. These properties represented 24.6 percent of all properties with a mortgage, up from 23.4 percent at the end of third quarter and up from 22.5 percent at the end of 2015.
 
States with highest share of seriously underwater properties were Nevada (19.5 percent), Illinois (16.6 percent), Ohio (16.3 percent), Missouri (14.6 percent) and Louisiana (14.5 percent). The major metro areas with the highest share of seriously underwater properties were Las Vegas (22.7 percent) and four Ohio cities: Cleveland (21.5 percent), Akron (20.1 percent), Dayton (20 percent) and Toledo (19.9 percent).
 
The states with the highest share of equity rich properties at the end of 2016 were Hawaii (37.8 percent), Vermont (36.9 percent), California (36 percent), New York (34.9 percent); and Oregon (32 percent). The metro areas with the highest share of equity rich properties were San Jose (51.6 percent), San Francisco (47.7 percent), Honolulu (39.8 percent) Los Angeles (39.2 percent) and Pittsburgh (35.8 percent).
 
“Since home prices bottomed out nationwide in the first quarter of 2012, the number of seriously underwater U.S. homeowners has decreased by about 7.1 million, an average decrease of about 1.4 million each year,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “Meanwhile, the number of equity rich homeowners has increased by nearly 4.8 million over the past three years, a rate of about 1.6 million each year.”
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