The percentage of U.S. properties on which the combined estimated balance of loans was at least 25 percent higher than the property’s estimated market value increased during the second quarter of 2018, according to ATTOM Data Solutions Q2 2018 U.S. Home Equity & Underwater Report.
According to the report, more than 5.5 million U.S. properties were seriously underwater during the second quarter, representing 10.1 percent of all properties with a mortgage. ATTOM said 9.5 percent of all properties were seriously underwater during the first quarter of 2018.
However, the report also found that more than 13.6 million U.S. properties in the second quarter were equity rich — where the combined estimated balance of loans secured by the property was 50 percent or less of the property’s estimated market value — representing 24.5 percent of all U.S. properties with a mortgage.
“The share of seriously underwater properties has dropped well below 10 percent in bellwether housing markets such as California, Washington, Texas, Colorado and New York, but the underwater rate remains stubbornly high in markets where price appreciation has not been as strong during the housing recovery of the last six years,” ATTOM Data Solutions
Senior Vice President Daren Blomquist said in a release.
“Nationwide the number of equity rich homeowners is more than twice the number of seriously underwater homeowners, but the gap between home equity haves and have-nots persists because home price appreciation is certainly not uniform across local markets or even within local markets,” Blomquist added.
The report identified the states with the highest share of seriously underwater properties as Louisiana (21.7 percent); Illinois (18.5 percent); Missouri (17.8 percent); Mississippi (16.8 percent); and Ohio (16.2 percent). The metropolitan statistical areas (MSAs) with the highest share of seriously underwater properties were Baton Rouge, La. (21 percent); Toledo, Ohio (20 percent); Scranton, Pa. (19.6 percent); Youngstown, Ohio (19.3 percent); and New Orleans (18.9 percent).
ATTOM found there were 65 ZIP codes in which more than half of all properties were seriously underwater during the second quarter. The five ZIP codes with the highest share of seriously underwater properties were 65809 in Springfield, Mo. (81 percent); 60134 in Geneva, Ill. (76 percent); 60124 in Elgin, Ill. (75.5 percent); 60175 in Saint Charles, Ill.(73.6 percent); and 60554 in Sugar Grove, Ill.(71.9 percent).
The states with the highest share of equity rich properties were California (43.5 percent); Hawaii (38.3 percent); Washington (34.5 percent); New York (33.2 percent); and Oregon (32.8 percent), the report said.
The MSAs with the highest share of equity rich properties were San Jose, Calif. (71.9 percent); San Francisco (60.8 percent); Los Angeles (47.9 percent); Seattle (41.1 percent); and San Diego (40).