Seriously Underwater Properties Down, Equity-Rich Properties Up
ATTOM Data Solutions, Irvine, Calif., said more than 5.2 million U.S. properties remained seriously underwater at the end of the first quarter, an improvement of nearly 300,000 from a year ago.
The company’s quarterly US. Home Equity & Underwater report also said nearly 14 million U.S. properties with a mortgage were equity rich at the end of Q1 2018, up by more than 122,000 from a year ago.
The report said seriously underwater U.S. properties fell by more than 291,000 properties from a year ago, the smallest year-over-year drop since ATTOM began tracking in Q1 2013. The 5.2 million seriously underwater properties at the end of the first quarter represented 9.5 percent of all U.S. properties with a mortgage, up from 9.3 percent in the previous quarter but down from 9.7 percent a year ago.
“We’ve reached a tipping point in this housing boom where enough homeowners have regained both sufficient equity and sufficient confidence to tap into their home equity–resulting in a noticeably slower decline in seriously underwater properties and slower growth in equity rich properties,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “This tapping of equity could take the form of a cash-out refinance, home equity loan or simply a home sale. We saw the biggest quarterly drop in average homeownership tenure for homeowners who sold in the first quarter since Q4 2008, evidence that more homeowners are reaching that equity-tapping tipping point more quickly and deciding to sell.”
The report noted more than 19.5 million U.S. properties had between 20 and 50 percent equity (LTV of between 80 and 50 percent) at the end of the first quarter, down by 1.71 million from a year ago, an 8 percent decrease. Homes with 20 to 50 percent equity represented 36.1 percent of all properties with a mortgage as of the end of the first quarter, down from 36.3 percent in the previous quarter and down from 37.6 percent a year ago.
ATTOM said equity-rich properties rose by more than 122,000 from a year ago but remained down from a peak of more than 14 million equity rich properties in Q2 2017. The 13.8 million equity rich properties represented 25.3 percent of all U.S. properties with a mortgage, down from 25.4 percent in the previous quarter but still up from 24.3 percent a year ago.
The report said states with the highest share of equity-rich homes were Hawaii (41.6 percent); California (41.5 percent); New York (34.8 percent); Washington (33.1 percent); and Oregon (31.8 percent). Among 98 metropolitan statistical areas with a population of at least 500,000, those with the highest share of equity-rich homes were San Jose, Calif. (66.1 percent); San Francisco (56.0 percent); Los Angeles (45.4 percent); Honolulu (43.1 percent); and Seattle (39.1 percent).
States with the highest share of seriously underwater homes at the end of the first quarter were Louisiana (20.1 percent); Mississippi (18.0 percent); Iowa (17.2 percent); West Virginia (15.9 percent); and Illinois (15.9 percent). Metro areas with the highest share of seriously underwater homes were Scranton, Pa. (21.9 percent); Baton Rouge, La. (19.9 percent); Youngstown, Ohio (19.5 percent); New Orleans (18.5 percent); and Toledo, Ohio (18.0 percent).
