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The bad news is that 67 million homes in the United States are seriously underwater. The good news is that that number hasn’t gotten worse.
RealtyTrac’s Home Equity and Underwater Report for Q2 found that 11.9 percent of U.S. properties are seriously underwater (LTV ratios of at least 125 percent), down from a full 12 percent in Q1. While largely flat when looked at as percentages, the numbers translate to more than 37,000 fewer properties in dire straits than Q1 and 776,000 fewer than a year ago.
Daren Blomquist, senior vice president at ATTOM Data Solutions (the new parent company of RealtyTrac), said that rising home prices “are lifting all home equity boats, bailing out seriously underwater homeowners and enriching homeowners who already have positive equity.”
Nationwide home prices reached a new all-time high in June, on the heels of 52 consecutive months of annual increases, Blomquist said.
“While that national trend is consistent in most markets across the country, there are still some local markets and sub-markets that have been largely left behind by the housing recovery and which still have a high percentage of underwater homeowners,” he said.
On the flip side, there were slightly more equity-rich properties (LTV of 50 percent or less) in Q2 ‒‒ 12.3 million properties, representing 22.1 percent of all U.S. properties with a mortgage. That’s up from 22 percent even in the previous quarter, and up from 19.6 percent in Q2 2015, an increased by 47,694 compared to the previous quarter and increased by more than 1.4 million compared to a year ago.
Ohio had several towns where properties were seriously underwater. More than 27 percent of properties in Cleveland were seriously underwater in Q2, while Akron, Dayon, and Toldeo all posted about 24 underwater rates. Cincinnati posted 15.6 percent.
Ohio, however, came in third among states with high underwater rates. Nevada, with 22.2 percent, led that list, followed by Illinois (22.1 percent), then Ohio (20.9 percent.
Major metros with a population of 2 million or more where the share of seriously underwater homeowners exceeded 15 percent included Chicago (22.5 percent); Detroit (21.3 percent); Kansas City (21.2 percent), Orlando (19.1 percent), St. Louis (17.8 percent), Tampa-St. Petersburg (17.8 percent), Miami (17.3 percent), and Baltimore (16.4 percent).
San Jose and San Francisco, despite having the least affordable markets in the U.S., had the lowest underwater rates, with 1.7 and 3.1 percent, respectively. Portland, Austin, and Oxnard also had fewer that 5 percent underwater properties.
