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Seriously Underwater U.S. Properties Increase From A Year Ago

ATTOM Data Solutions today released its Q1 2019 U.S. Home Equity & Underwater Report, which shows that at the end of the first quarter of 2019, more than 5.2 million (5,223,524) U.S. properties were seriously underwater (where the combined balance of loans secured by the property was at least 25 percent higher than the property’s estimated market value), up by more than 17,000 properties from a year ago.

The 5.2 million seriously underwater properties at the end of Q1 2019 represented 9.1 percent of all U.S. properties with a mortgage, up from 8.8 percent in the previous quarter but down from 9.5 percent in Q1 2018.

“With home prices increasing at a slower pace in 2018, than in previous years, the potential for people to climb out from mortgages that are underwater or advance into equity-rich territory, tends to be reduced,” said Todd Teta, chief product officer at ATTOM Data Solutions. “However, only one in 11 mortgages are seriously underwater today, compared to nearly one in three during the depths of the recession. Although, if the latest trend continues, it will raise another clear signal of a market slowdown, which will be good for buyers, but not so good for sellers. But if the pattern of the past few years takes hold – with levels of underwater and equity rich mortgages turning around – it will mean the market remains strong for sellers, with fewer needing to get out from under financial distress.”

Historical U.S. Underwater & Equity Rich Trends

  US Properties % Seriously US Properties      %
Qtr/Year Serious Underwater Underwater Equity Rich Equity Rich
Q1 2012 12,533,155 27.80%
Q2 2012 12,824,279 28.60%
Q3 2012 12,472,262 27.60%
Q1 2013 10,894,743 25.80%
Q2 2013 11,336,033 25.70%
Q3 2013 10,714,924 23.20%
Q4 2013 9,274,126 18.80% 9,097,325 18.50%
Q1 2014 9,065,741 17.50% 9,935,939 19.10%
Q2 2014 9,074,449 17.20% 9,945,646 18.90%
Q3 2014 8,135,648 15.00% 10,812,968 20.10%
Q4 2014 7,052,570 12.70% 11,249,646 20.30%
Q1 2015 7,341,922 13.20% 11,053,055 19.80%
Q2 2015 7,443,580 13.30% 10,963,041 19.60%
Q3 2015 6,917,673 12.70% 10,476,259 19.20%
Q4 2015 6,436,381 11.50% 12,621,274 22.50%
Q1 2016 6,703,857 12.00% 12,335,651 22.00%
Q2 2016 6,666,622 11.90% 12,383,345 22.10%
Q3 2016 6,063,326 10.80% 13,125,367 23.40%
Q4 2016 5,408,323 9.60% 13,877,315 24.60%
Q1 2017 5,497,771 9.70% 13,718,473 24.30%
Q2 2017 5,433,684 9.50% 14,038,372     24.6%
Q3 2017  4,628,408 8.70% 14,030,394 26.40%
Q4 2017 5,032,185 9.30% 13,731,767 25.40%
Q1 2018 5,206,446 9.50% 13,841,082 25.30%

 

Highest seriously underwater share in Louisiana, Mississippi, Arkansas, West Virginia 

States with the highest share of seriously underwater properties were Louisiana (20.7 percent); Mississippi (17.1 percent); Arkansas (16.3 percent); West Virginia (16.2 percent); and Illinois (16.2 percent).

Among 99 metropolitan statistical areas analyzed in the report, those with the highest share of seriously underwater properties were Baton Rouge, Louisiana (21.3 percent); Scranton, Pennsylvania (20.0 percent); Youngstown, Ohio (19.2 percent); Toledo, Ohio (19.2 percent); and New Orleans, Louisiana (17.8 percent).

32 zip codes where more than half of all properties are seriously underwater

Among 7,639 U.S. zip codes with at least 2,500 properties with mortgages, there were 32 zip codes where more than half of all properties with a mortgage were seriously underwater, including zip codes in the Milwaukee, Trenton, Chicago, Saint Louis, and Cleveland metropolitan statistical areas.

The top five zip codes with the highest share of seriously underwater properties were 53206 in Milwaukee, Wisconsin (70.5 percent seriously underwater); 08611 in Trenton, New Jersey (68.9 percent); 69361 in Scottsbluff, Nebraska (63.4 percent); 60426 in Harvey, Illinois (63.1 percent); and 61104 in Rockford, Illinois (62.8 percent).

Q1 2019 Underwater Properties by ZIP

Highest equity rich share in California, Hawaii, New York, Washington, Vermont

States with the highest share of equity rich properties were California (43.0 percent); Hawaii (38.1 percent); New York (34.2 percent); Washington (33.2 percent); and Vermont (32.8 percent).

Among 99 metropolitan statistical areas analyzed in the report, those with the highest share of equity rich properties were San Jose, California (68.3 percent); San Francisco, California (58.4 percent); Los Angeles, California (48.1 percent); Santa Rosa, California (47.6 percent); and San Diego, California (39.3 percent).

408 zip codes where more than half of all properties are equity rich

Among 7,639 U.S. zip codes with at least 2,500 properties with mortgages, there were 408 zip codes where more than half of all properties with a mortgage were equity rich.

The top five zip codes with the highest share of equity rich properties were all located in the San Jose and San Francisco markets in California: 94040 in Mountain View (82.3 percent equity rich); 94116 in San Francisco (81.7 percent); 94087 in Sunnyvale (81.6 percent); 94085 in Sunnyvale (81.1 percent); and 94122 in San Francisco (81.0 percent).

Q1 2019 Equity Rich Properties by ZIP

Report methodology

The ATTOM Data Solutions U.S. Home Equity & Underwater report provides counts of residential properties based on several categories of equity — or loan to value (LTV) — at the state, metro, county and zip code level, along with the percentage of total residential properties with a mortgage that each equity category represents. The equity/LTV is calculated based on record-level loan model estimating position and balance of loans secured by a property and a record-level automated valuation model (AVM) derived from publicly recorded mortgage and deed of trust data collected and licensed by ATTOM Data Solutions nationwide for more than 155 million U.S. properties.

Definitions

Seriously underwater: Loan to value ratio of 125 percent or above, meaning the property owner owed at least 25 percent more than the estimated market value of the property.

Equity rich: Loan to value ratio of 50 percent or lower, meaning the property owner had at least 50 percent equity.   

 

 

 

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