RealtyTrac, a source for comprehensive housing data, released its U.S. Home Equity & Underwater Report for the fourth quarter of 2014, which shows that at the end of the year there were 7,052,570 U.S. residential properties seriously underwater — where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value — representing 13 percent of all properties with a mortgage.
The number and share of seriously underwater homeowners at the end of the fourth quarter of 2014 were both at their lowest levels since RealtyTrac began tracking home equity trends in the first quarter of 2012, and are down from a peak of 12.8 million seriously underwater homeowners representing 29 percent of all homeowners with a mortgage in the second quarter of 2012.
“Median home prices nationwide bottomed out in March 2012 and since then have increased 35 percent, lifting 5.8 million homeowners out of seriously underwater territory,” RealtyTrac Vice President Daren Blomquist said. “While the remaining seriously underwater properties continue to be a millstone around the neck of some local markets, the growing number of equity rich homeowners should help counteract the downward pull of negative equity in many markets, empowering those housing markets — and by extension their local economies — to walk on water in 2015.”
There were 11,249,646 equity rich U.S. residential properties with at least 50 percent positive equity at the end of 2014, representing 20 percent of all properties with a mortgage. That was up nearly 2.2 million from 9,097,325 equity rich properties at the end of 2013.
Major markets where the share of seriously underwater properties was below 10 percent at the end of 2014 included San Jose, Calif., (2 percent); Denver (4 percent); Portland, Ore. (5 percent); Minneapolis (5 percent); Boston (5 percent); San Francisco (5 percent); Pittsburgh (6 percent); Houston (8 percent); Dallas (8 percent) and Seattle (9 percent).
Distressed properties with positive equity exceeds seriously underwater in Q4
The share of distressed properties — those in some stage of foreclosure — with positive equity surpassed the share of distressed properties that were seriously underwater in the fourth quarter for the first time since RealtyTrac began tracking those metrics a year ago. At the end of the fourth quarter, 42 percent of distressed properties had some positive equity compared with 31 percent a year ago. Meanwhile 35 percent of distressed properties were seriously underwater at the end of the fourth quarter, compared with 48 percent a year ago.
Other major markets where the share of distressed properties with positive equity exceeded 60 percent included Pittsburgh (81 percent); Oklahoma City (76 percent); Austin, Texas (73 percent); Nashville, Tenn. (70 percent); San Antonio (63 percent); San Francisco (62 percent) and Raleigh, N.C. (61 percent).