ATTOM: ‘Seriously Underwater’ Properties Shrink by 776,000 from Year Ago
ATTOM Data Solutions, Irvine, Calif., reported 6.666 million U.S. properties as “seriously underwater as of June 30, down by 776,000 from a year ago and down by 6.1 million from its 2012 peak.
ATTOM, parent company of RealtyTrac, said underwater properties represent 11.9 of all housing in the U.S. with a mortgage, down from 12.0 percent in the first quarter and from 13.3 percent a year ago.
ATTOM analyzed recorded mortgage and deed of trust data from more than 1,400 U.S. counties accounting for 88 percent of the U.S. population along with automated valuation models for more than 56 million properties with mortgages in those counties.
“Rising home prices are lifting all home equity boats: bailing out seriously underwater homeowners and enriching homeowners who already have positive equity,” said Daren Blomquist, senior vice president with ATTOM. “While that national trend is consistent in most markets across the country, there are still some local markets and sub-markets that have been largely left behind by the housing recovery and which still have a high percentage of underwater homeowners.”
ATTOM reported the number of seriously underwater properties (those with an LTV of 125 percent or more) decreased by 37,235 compared to the first quarter and decreased by 776,958 compared to a year ago.
The report also noted 12.39 million equity rich properties (loan-to-value ratio of 50 percent or less), representing 22.1 percent of all U.S. properties with a mortgage at the end of the second quarter, up from 22.0 percent in the first quarter and 19.6 percent a year ago. Equity rich properties increased by 47,694 compared to the first quarter and increased by more than 1.4 million compared to a year ago.
Among 88 metropolitan statistical areas analyzed for the report with a population of 500,000 or more, those with the highest share of seriously underwater properties were Cleveland, Ohio (27.5 percent); Las Vegas (25.7 percent); Akron, Ohio (24.9 percent); Dayton, Ohio (24.1 percent); and Toledo, Ohio (23.6 percent). Major markets with a population of two million or more where the share of seriously underwater homeowners exceeded 15 percent included Chicago (22.5 percent); Detroit (21.3 percent); Kansas City (21.2 percent); Orlando (19.1 percent); St. Louis (17.8 percent); Tampa-St. Petersburg (17.8 percent); Miami (17.3 percent); Baltimore (16.4 percent); and Cincinnati (15.6 percent).
States with the highest percentage of seriously underwater properties were Nevada (22.2 percent), Illinois (22.1 percent), Ohio (20.9 percent), Indiana (18.6 percent) and Missouri (18.2 percent).
Metro areas with the lowest share of seriously underwater properties were San Jose, Calif. (1.7 percent); San Francisco (3.7 percent); Portland, Ore. (3.9 percent); Austin, Texas (3.9 percent); and Oxnard-Thousand Oaks-Ventura, Calif. (4.1 percent). Other markets with a population of one million or more where the share of seriously underwater properties was below 10 percent included Denver (4.1 percent); San Diego (4.8 percent); Los Angeles (5.0 percent); Seattle (5.5 percent); Minneapolis-St. Paul (5.5 percent); Houston (5.7 percent); Dallas-Fort Worth (6.0 percent); San Antonio (6.4 percent); Pittsburgh (7.2 percent); and Sacramento (8.3 percent).
Other key data:
–34.4 percent of properties with an estimated market value up to $100,000 are seriously underwater compared to just 4.9 percent of properties with an estimated market value above $750,000.
–Loan vintage: 26.4 percent of properties with a loan originated between 2004 and 2008 are seriously underwater compared to 8.3 percent with a loan originated since 2009.
–Occupancy status: 21.8 percent of non-owner occupied properties are seriously underwater compared to 9.1 percent of occupied properties.
–Ownership type: 43.5 percent of properties owned by a company/corporation/incorporated owner are seriously underwater compared to 10.1 percent of properties owned by a husband and wife.
–Property tax rate: 21.4 percent of properties with an effective property tax rate above 2 percent of market value are seriously underwater, compared to 11.8 percent of properties with an effective property tax rate below 1 percent.
This morning, the Mortgage Bankers Association releases its Second Quarter National Delinquency Survey.
The NDS, conducted since 1953, covers 39 million loans on one- to four- unit residential properties, representing 88 percent of all “first-lien” residential mortgage loans outstanding in the United States. Loans surveyed were reported by more than 100 lenders, including mortgage bank, commercial banks and thrifts.
Recent NDS reports have noted continued drops in both mortgage delinquency and foreclosure rates, albeit still at elevated levels resulting from loans made during the Great Recession.
The report comes out at 10:00 a.m. ET. MBA NewsLink and MBA Servicing NewsLink will provide coverage, with commentary from the MBA Research & Economics team.
