The number of U.S. homeowners who were seriously underwater in the third quarter declined 11 percent from the previous quarter, falling to the lowest level in more than two years, according to RealtyTrac's Q3 2014 Home Equity & Underwater Report released today. RealtyTrac reported that 8.1 million U.S. homeowners, representing 15 percent of all mortgages in the country, were seriously underwater on their mortgage in Q3, the lowest percentage of underwater mortgages nationwide since RealtyTrac began tracking the data in the first quarter of 2012.
The nation's seriously underwater mortgage rate has been steadily declining since Q2 2012. For that quarter, properties with a mortgage in the U.S. that were seriously underwater reached their peak at 12.8 million, or 29 percent. By the third quarter of 2013, the number of seriously underwater properties in the nation had fallen to 10.7 million, representing 23 percent of the nation's mortgages. For the second quarter 2014, RealtyTrac reported there were 9.1 million seriously underwater properties, or 17 percent of all mortgages in the U.S.
Ongoing declines in mortgage interest rates helped spur a pickup in refinance volumes at Fannie Mae and Freddie Mac in August, even as interest in the government's Home Affordable Refinance Program continues to wane. According to a report released this week by the FHFA, total refinance volumes at the GSEs came to about 131,000 in August, up more than 11,000 from July. While overall refinancing activity increased, however, the number of refinances completed through HARP fell to about 14,000 in August, accounting for 11 percent of all refinances, compared to 13 percent in July.