ATTOM: Pre-COVID-19, Steady Rates for Equity-Rich Homeowners
ATTOM Data Solutions, Irvine, Calif., said data gathered before the impact of the coronavirus pandemic showed equity-rich American homeowners dipped slightly in the first quarter, even as the share of seriously underwater homeowners edged up.
The company’s first-quarter U.S. Home Equity & Underwater Report showed 14.5 million residential properties in the United States were considered equity-rich, meaning the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value. This represented 26.5 percent of the 54.7 million mortgaged homes in the U.S, down slightly from 26.7 percent in the fourth quarter.
The report also showed just 3.6 million, or one in 15, mortgaged homes in the first quarter were considered seriously underwater, with a combined estimated balance of loans secured by the property at least 25 percent more than the property’s estimated market value. That figure represented 6.6 percent of all U.S. properties with a mortgage, up slightly from 6.4 percent in the prior quarter.
“Homeowners’ balance sheets generally remained strong in the first quarter of 2020 across the U.S., with about the same levels of equity-rich or seriously underwater mortgages as in the prior quarter,” said Todd Teta, chief product officer with ATTOM Data Solutions. “In the latest marker of the ongoing housing market boom, mortgage payers were four times as likely to have homes worth considerably more than what they owed on their loans than considerably less. But as with other rosy first-quarter reports, this one needs to be taken in the context of the looming impact of the coronavirus pandemic. With the potential for home values to fall, there is a significant chance that equity levels could drop over the coming months while underwater levels rise.”
The Mortgage Bankers Association will release its quarterly National Delinquency Survey next week. MBA has provided the NDS since 1953; it is based on a sample of nearly 40 million first lien loans serviced by mortgage companies, commercial banks, thrifts, credit unions and others and provides quarterly delinquency and foreclosure statistics at the national, regional and state levels.
ATTOM said states with the highest share of equity-rich properties in the first quarter were all in the Northeast and West regions, led by California (42.3 percent), Hawaii (39.0 percent), Vermont (38.2 percent), Washington (36.6 percent) and Oregon (34.0 percent). States with the lowest percentage of equity-rich properties were Louisiana (13.5 percent), Oklahoma (14.7 percent), Illinois (15.2 percent), Arkansas (16.3 percent) and Alabama (16.3 percent). Those were the same states with the five lowest levels in the fourth quarter.
Among 107 metropolitan statistical areas analyzed in the report with a population greater than 500,000, metrs with the highest shares of equity-rich properties in the first quarter were all in California: San Jose (64.8 percent), San Francisco (57.0 percent), Los Angeles (47.4 percent), Santa Rosa (45.5 percent) and San Diego (40.0 percent). Metro areas with the lowest percentage of equity-rich properties were Baton Rouge, La. (10.3 percent); Columbia, S.C. (13.5 percent); Little Rock, Ark. (13.6 percent); Tulsa, Okla. (13.8 percent) and Dayton, Ohio (14.5 percent).
States with the highest shares of seriously underwater mortgages in the first quarter were all in the South and Midwest regions, led by Louisiana (17.3 percent), Mississippi (16.9 percent), West Virginia (15.7 percent), Iowa (14.2 percent) and Arkansas (13.0 percent). Among 107 metropolitan statistical areas analyzed in the report with a population greater than 500,000, those with the highest share of seriously underwater mortgages were Youngstown, Ohio (17.0 percent); Baton Rouge, La. (16.4 percent); Scranton, Pa. (14.5 percent); Toledo, Ohio (14.3 percent) and Cleveland (13.7 percent).