ATTOM: 1 in 10 U.S. Properties Remain ‘Seriously Underwater’

ATTOM Data Solutions, Irvine, Calif., reported 5.5 million U.S. properties as “seriously underwater” in the second quarter, representing 10.1 percent of all properties with a mortgage.

The company’s quarterly U.S. Home Equity & Underwater Report said the combined estimated balance of loans secured by the property was at least 25 percent higher than the property’s estimated market value.

The report also said more than 13.6 million U.S. properties in the second quarter were “equity rich”–where the combined estimated balance of loans secured by the property was 50 percent or less of the property’s estimated market value–representing 24.5 percent of all U.S. properties with a mortgage.

The report comes out ahead of next week’s quarterly National Delinquency Report by the Mortgage Bankers Association, which covers 39 million loans on one- to four- unit residential properties reported by more than 100 lenders, including mortgage bank, commercial banks and thrifts.

“The share of seriously underwater properties has dropped well below 10 percent in bellwether housing markets such as California, Washington, Texas, Colorado and New York, but the underwater rate remains stubbornly high in markets where price appreciation has not been as strong during the housing recovery of the last six years,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “Nationwide the number of equity rich homeowners is more than twice the number of seriously underwater homeowners, but the gap between home equity haves and have-nots persists because home price appreciation is certainly not uniform across local markets or even within local markets.”

The report said states with the highest share of seriously underwater properties were Louisiana (21.7 percent); Illinois (18.5 percent); Missouri (17.8 percent); Mississippi (16.8 percent); and Ohio (16.2 percent).

Among 97 metropolitan statistical areas analyzed, those with the highest share of seriously underwater properties were Baton Rouge, La. (21.0 percent); Toledo, Ohio (20.0 percent); Scranton, Pa. (19.6 percent); Youngstown, Ohio (19.3 percent); and New Orleans (18.9 percent).

States with the highest share of equity rich properties were California (43.5 percent); Hawaii (38.3 percent); Washington (34.5 percent); New York (33.2 percent); and Oregon (32.8 percent). Metro areas with the highest share of equity rich properties were San Jose, Calif. (71.9 percent); San Francisco (60.8 percent); Los Angeles (47.9 percent); Seattle (41.1 percent); and San Diego (40.0 percent).

MBA will release its 2nd Quarter National Delinquency Survey on Thursday, Aug. 16.