More than 14 million residential properties in the U.S. were considered equity-rich during the first quarter, according to a report from ATTOM Data Solutions.
ATTOM’s 2020 U.S. Home Equity and Underwater Report said those 14.5 million homes represented 26.5 percent of the 54.7 million mortgaged homes in the U.S. That percentage was down slightly from the 26.7 percent level in the fourth quarter of 2019.
The report also found that 3.6 million, or one in 15, mortgaged homes in the first quarter were considered seriously underwater, with a combined estimated balance of loans secured by the property at least 25 percent more than the property’s estimated market value. That figure represented 6.6 percent of all U.S. properties with a mortgage, up slightly from 6.4 percent in the prior quarter.
“Homeowners’ balance sheets generally remained strong in the first quarter of 2020 across the U.S., with about the same levels of equity-rich or seriously underwater mortgages as in the prior quarter,” ATTOM Chief Product Officer Todd Teta said in a release. “In the latest marker of the ongoing housing market boom, mortgage payers were four times as likely to have homes worth considerably more than what they owed on their loans than considerably less.
“But as with other rosy first-quarter reports, this one needs to be taken in the context of the looming impact of the coronavirus pandemic,” Teta said. “With the potential for home values to fall, there is a significant chance that equity levels could drop over the coming months while underwater levels rise.”
The report said the states with the highest share of equity-rich properties in the first quarter were California (42.3 percent); Hawaii (39 percent); Vermont (38.2 percent); Washington (36.6 percent); and Oregon (34 percent).
The states with the lowest percentage of equity-rich properties in the first quarter were Louisiana (13.5 percent); Oklahoma (14.7 percent); Illinois (15.2 percent); Arkansas (16.3 percent); and Alabama (16.3 percent).
ATTOM said the metropolitan statistical areas (MSAs) with the highest shares of equity-rich properties in the first quarter were San Jose, Calif. (64.8 percent); San Francisco (57 percent); Los Angeles (47.4 percent)’ Santa Rosa, Calif. (45.5 percent); and San Diego (40 percent).
The MSAs with the lowest percentage of equity-rich properties were Baton Rouge, La. (10.3 percent); Columbia, S.C. (13.5 percent); Little Rock, Ark. (13.6 percent); Tulsa, Okla. (13.8 percent); and Dayton, Ohio (14.5 percent).
The states with the highest shares of mortgages that were seriously underwater in the first quarter were Louisiana (17.3 percent); Mississippi (16.9 percent); West Virginia (15.7 percent); Iowa (14.2 percent); and Arkansas (13.0 percent).
The report said the MSAs with the highest share of mortgages that were seriously underwater in the first quarter were Youngstown, Ohio (17 percent); Baton Rouge, La. (16.4 percent); Scranton, Pa (14.5 percent); Toledo, Ohio (14.3 percent); and Cleveland (13.7 percent).