More than 5.5 million U.S. properties were seriously underwater in the second quarter, representing 10.1% of all U.S. properties with a mortgage, according to the ATTOM Data Solutions Q2 2018 U.S. Home Equity & Underwater Report out Thursday.
Seriously underwater homes are identified as those in which the combined estimated balance of loans secured by the property was at least 25% higher than the property’s estimated market value.
The report also shows that more than 13.6 million U.S. properties in Q2 2018 were equity rich — where the combined estimated balance of loans secured by the property was 50% or less of the property’s estimated market value — representing 24.5% of all U.S. properties with a mortgage.
“The share of seriously underwater properties has dropped well below 10% 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,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “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.”
States with the highest share of seriously underwater properties were Louisiana (21.7%); Illinois (18.5%); Missouri (17.8%); Mississippi (16.8%); and Ohio (16.2%).
Among 97 metropolitan statistical areas analyzed in the report, those with the highest share of seriously underwater properties were Baton Rouge, Louisiana (21.0%); Toledo, Ohio (20.0%); Scranton, Pennsylvania (19.6%); Youngstown, Ohio (19.3%); and New Orleans, Louisiana (18.9%).
Among 7,290 U.S. zip codes with at least 2,500 properties with loans, there were 65 zip codes where more than half of all properties with a mortgage were seriously underwater, including zip codes in Springfield, Missouri; Columbia, Missouri; Northern New Jersey; Detroit; St. Louis; and Memphis.
The top five zip codes with the highest share of seriously underwater properties were 65809 in Springfield, Missouri (81.0%) followed by four zip codes in the greater Chicago area: 60134 in Geneva, Illinois (76.0%); 60124 in Elgin, Illinois (75.5%); 60175 in Saint Charles, Illinois (73.6%); and 60554 in Sugar Grove, Illinois (71.9%).
States with the highest share of equity rich properties were California (43.5%); Hawaii (38.3%); Washington(34.5%); New York (33.2%); and Oregon (32.8%).
Among 97 metropolitan statistical areas analyzed in the report, those with the highest share of equity rich properties were San Jose, California (71.9%); San Francisco, California (60.8%); Los Angeles, California (47.9%); Seattle, Washington (41.1%); and San Diego, California (40.0%).
Among 7,290 U.S. zip codes with at least 2,500 properties with loans, there were 437 zip codes where more than half of all properties with a mortgage were equity rich, including zip codes in New York City, Los Angeles, San Francisco, Dallas-Fort Worth, and Denver.
The top five zip codes with the highest share of equity rich properties were all in the California Bay area: 94116 in San Francisco (85.9% equity rich); 94086 in Sunnyvale (84.3% equity rich); 94040 in Mountain View (84.3% equity rich); 94087 in Sunnyvale (84.3% equity rich); and 94122 in San Francisco (84.2% equity rich).
