The number of seriously underwater properties in the U.S. dropped by nearly 300,000 during this year’s first quarter, according to ATTOM Data Solutions.
According to ATTOM’s Q1 2018 U.S. Home Equity & Underwater Report, at the end of the first quarter there were more than 5.2 million properties on which the combined balance of loans was at least 25 percent higher than the property’s estimated market value. Year-over-year, that number is down by more than 291,000 properties, Still, ATTOM said the decrease is the smallest year-over-year drop since it began tracking such properties in 2013.
The 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 one 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,” ATTOM Senior Vice President Daren Blomquist said in a release.
“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,” Blomquist added.
ATTOM said the states with the highest percentage of seriously underwater properties 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).
The metro areas with the highest percentage of seriously underwater homes at the end of first quarter 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). Other metro areas with more than 13 percent of seriously underwater properties were Cleveland (16.5 percent); Milwaukee (16.0 percent); St. Louis (14.7 percent); Chicago (13.8 percent); Detroit (13.6 percent); Virginia Beach (13.4 percent); and Kansas City, Mo. (13.4 percent).