ATTOM Data Solutions’ recently released Q2 2016 U.S. Home Equity and Underwater Report shows 6,666,622 seriously underwater properties. That number represents 11.9 percent of all U.S. properties with a mortgage as of the end of the second quarter 2016—down from 12.0 percent in the previous quarter and down from 13.3 percent in Q2 2015.
ATTOM is the new parent company of national data housing statistics provider RealtyTrac.
For the report, ATTOM analyzed recorded mortgage and deed of trust data from more than 1,400 U.S. counties, accounting for 88 percent of the U.S. population along with automated valuation models (AVMs) for more than 56 million properties with mortgages in those counties.
“Rising home prices are lifting all home equity boats, bailing out seriously underwater homeowners and enriching homeowners who already have positive equity,” said Daren Blomquist, ATTOM Data Solutions senior vice president. “Nationwide home prices reached a new all-time high in June on the heels of 52 consecutive months of annual increases. 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.”
The number of seriously underwater properties (those with an LTV of 125 percent or more) decreased by 37,235 compared to the first quarter and decreased by 776,958 compared to a year ago. Since the peak of 12.8 million in Q2 2012, the number of seriously underwater properties has decreased by more than 6.1 million.
There were 12,383,345 equity rich properties (LTV of 50 percent or less) representing 22.1 percent of all U.S. properties with a mortgage at the end of Q2 2016—up from 22.0 percent in the previous quarter and 19.6 percent in Q2 2015. The number of equity rich properties increased by 47,694 compared to the previous quarter and increased by more than 1.4 million compared to a year ago.
| Qtr-Year | Percent Seriously Underwater | Total Underwater | Equity Rich | Pct Equity Rich |
| Q1 2012 | 27.8% | 12,533,155 | ||
| Q2 2012 | 28.6% | 12,824,279 | ||
| Q3 2012 | 27.6% | 12,472,262 | ||
| Q1 2013 | 25.8% | 10,894,743 | ||
| Q2 2013 | 25.7% | 11,336,033 | ||
| Q3 2013 | 23.2% | 10,714,924 | ||
| Q4 2013 | 18.8% | 9,274,126 | 9,097,325 | 18.5% |
| Q1 2014 | 17.5% | 9,065,741 | 9,935,939 | 19.1% |
| Q2 2014 | 17.2% | 9,074,449 | 9,945,646 | 18.9% |
| Q3 2014 | 15.0% | 8,135,648 | 10,812,968 | 20.1% |
| Q4 2014 | 12.7% | 7,052,570 | 11,249,646 | 20.3% |
| Q1 2015 | 13.2% | 7,341,922 | 11,053,055 | 19.8% |
| Q2 2015 | 13.3% | 7,443,580 | 10,963,041 | 19.6% |
| Q3 2015 | 12.7% | 6,917,673 | 10,476,259 | 19.2% |
| Q4 2015 | 11.5% | 6,436,381 | 12,621,274 | 22.5% |
| Q1 2016 | 12.0% | 6,703,857 | 12,335,651 | 22.0% |
| Q2 2016 | 11.9% | 6,666,622 | 12,383,345 | 22.1% |
Highest underwater rates
Among 88 metropolitan statistical areas analyzed for the report with a population of 500,000 or more and sufficient data, those with the highest share of seriously underwater properties were Cleveland, Ohio (27.5 percent); Las Vegas (25.7 percent); Akron, Ohio (24.9 percent); Dayton, Ohio (24.1 percent); and Toledo, Ohio (23.6 percent).
Other major markets 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), Baltimore (16.4 percent), and Cincinnati (15.6 percent).
“South Florida continues to see an equity improvement greater than the national average due to our strong growth,” said Mike Pappas, CEO and president at the Keyes Company, covering the South Florida market. “Our underwater homes saw a 3-x improvement over the average with the high equity owners experiencing a 1.8-x improvement. With our limited land and strong in-migration we will continue to see improvement in equity.”
States with the highest percentage of seriously underwater properties were Nevada (22.2 percent), Illinois (22.1 percent), Ohio (20.9 percent), Indiana (18.6 percent), and Missouri (18.2 percent).
ZIP Codes with Seriously Underwater Properties
Among 9,844 U.S. ZIP codes with at least 2,500 total properties, those with the highest share underwater at the end of Q2 2016 were 63137 in the St. Louis metro area (79.8 percent); 60827 in the Chicago metro area (76.3 percent); 08611 in the Trenton, New Jersey, metro area (75.8 percent); 60419 in the Chicago metro area (74.6 percent); and 48235 in the Detroit metro area (73.3 percent).
Other ZIP codes with at least two-thirds of properties seriously underwater included ZIP codes in Milwaukee; Columbus, Ohio; and Las Vegas. There were a total of 29 U.S. ZIP codes with more than two-thirds of properties seriously underwater as of the end of Q2 2016.
Lowest underwater rates
Metro areas with the lowest share of seriously underwater properties were San Jose, California (1.7 percent); San Francisco, California (3.7 percent); Portland, Oregon (3.9 percent); Austin, Texas (3.9 percent); and Oxnard-Thousand Oaks-Ventura, California (4.1 percent);
Other markets with a population of 1 million or more where the share of seriously underwater properties was below 10 percent included Denver (4.1 percent); San Diego (4.8 percent); Los Angeles (5.0 percent); Seattle (5.5 percent); Minneapolis-St. Paul (5.5 percent); Houston (5.7 percent); Dallas-Fort Worth (6.0 percent); San Antonio (6.4 percent), Pittsburgh (7.2 percent), and Sacramento (8.3 percent).
“Since the middle of 2013, the greater Seattle area has seen an impressive 73 percent drop in the number of homes that are seriously underwater,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “We owe this drop to our rapidly expanding economy and very limited supply of homes for sale, which has pushed home prices up dramatically. Given this rapid increase in prices, we’ve seen a 72 percent increase in the number of homes that are now considered equity rich in the Seattle area.”
Profile of Seriously Underwater Properties
ATTOM matched the home equity data against property and ownership characteristic data—including occupancy status, market value, property tax rate, ownership description and congressional district—to provide a profile of the who, what, when, where and why for seriously underwater properties.
- Property value: 34.4 percent of properties with an estimated market value up to $100,000 are seriously underwater compared to just 4.9 percent of properties with an estimated market value above $750,000.
- Loan vintage: 26.4 percent of properties with a loan originated between 2004 and 2008 are seriously underwater compared to 8.3 percent with a loan originated since 2009.
- Occupancy status: 21.8 percent of non-owner-occupied properties are seriously underwater compared to 9.1 percent of occupied properties.
- Ownership type: 43.5 percent of properties owned by a Company/Corporation/Incorporated owner are seriously underwater compared to 10.1 percent of properties owned by a husband and wife.
- Property tax rate: 21.4 percent of properties with an effective property tax rate above 2 percent of market value are seriously underwater, compared to 11.8 percent of properties with an effective property tax rate below 1 percent.
- Political party: 13.1 percent of properties located in a congressional district with a Democratic representative are seriously underwater compared to 10.8 percent seriously underwater in a congressional district with a Republican representative.
Report methodology
The ATTOM Data Solutions U.S. Home Equity & Underwater report provides counts of properties based on categories of equity—or loan to value (LTV)—at the state, metro, county and ZIP code level, along with the percentage of total residential properties with a mortgage that each equity category represents. The equity/LTV calculation is derived from a combination of record-level open loan data and record-level estimated property value data, and is also matched against record-level foreclosure data to determine foreclosure status for each equity/LTV category.
Definitions
Seriously underwater: Loan to value ratio of 125 percent or above, meaning the homeowner owed at least 25 percent more than the estimated market value of the property.
Equity rich: Loan to value ratio of 50 percent or lower, meaning the homeowner had at least 50 percent equity.
Foreclosures w/equity: Properties in some stage of the foreclosure process (default or scheduled for auction, not including bank-owned) where the loan to value ratio was 100 percent or lower.
Q2 2016 Seriously Underwater Data by State
| State | Total Seriously Underwater (LTV 125+) | Pct Seriously Underwater | QoQ Change in Count | YoY Change in Count |
| United States | 6,666,622 | 11.9% | (37,235) | (776,958) |
| Alabama | 46,342 | 12.7% | 4,352 | 4,567 |
| Alaska | 2,408 | 3.4% | (300) | (1,431) |
| Arizona | 224,014 | 12.2% | (20,141) | (47,194) |
| Arkansas | 29,613 | 12.8% | 864 | 4,573 |
| California | 577,208 | 7.1% | (34,355) | (174,684) |
| Colorado | 68,179 | 5.2% | (1,209) | (8,723) |
| Connecticut | 120,417 | 13.2% | 2,449 | (16,071) |
| Delaware | 32,285 | 14.8% | 3,405 | 852 |
| District of Columbia | 12,615 | 9.7% | 314 | (6,030) |
| Florida | 977,419 | 17.4% | (71,902) | (312,526) |
| Georgia | 228,354 | 14.4% | 224 | (41,545) |
| Hawaii | 16,343 | 6.0% | 325 | 1,487 |
| Idaho | 9,176 | 5.6% | (530) | (2,404) |
| Illinois | 591,810 | 22.1% | (3,810) | (32,498) |
| Indiana | 89,879 | 18.6% | 13,660 | 6,379 |
| Iowa | 25,899 | 9.3% | 2,675 | 4,327 |
| Kansas | 665 | 7.4% | (318) | 419 |
| Kentucky | 23,973 | 8.7% | 1,216 | (6) |
| Louisiana | 42,701 | 14.8% | 3,692 | 8,125 |
| Maine | 21,081 | 9.0% | 2,461 | (1,137) |
| Maryland | 253,239 | 16.4% | 12,311 | 911 |
| Massachusetts | 95,485 | 6.4% | 3,606 | (20,707) |
| Michigan | 290,884 | 18.0% | 6,567 | (30,848) |
| Minnesota | 44,841 | 6.0% | 76 | (770) |
| Mississippi | 1,818 | 5.7% | 90 | (168) |
| Missouri | 170,384 | 18.2% | 8,241 | 7,061 |
| Montana | 3,393 | 5.2% | 186 | (764) |
| Nebraska | 22,714 | 8.6% | 1,784 | 1,869 |
| Nevada | 171,452 | 22.2% | (3,086) | (16,512) |
| New Hampshire | 22,769 | 8.4% | 2,160 | (1,466) |
| New Jersey | 263,204 | 14.8% | 8,828 | (2,682) |
| New Mexico | 19,423 | 7.3% | 315 | (7,343) |
| New York | 203,865 | 9.2% | 12,090 | 2,569 |
| North Carolina | 176,929 | 10.4% | 199 | (4,955) |
| North Dakota | 1,365 | 4.4% | 70 | 82 |
| Ohio | 501,627 | 20.9% | 2,038 | 5,297 |
| Oklahoma | 52,968 | 9.9% | 2,033 | 7,494 |
| Oregon | 47,701 | 5.4% | (1,432) | (22,531) |
| Pennsylvania | 276,894 | 12.5% | 6,682 | 12,600 |
| Rhode Island | 28,556 | 11.2% | (1,087) | (7,802) |
| South Carolina | 92,251 | 10.9% | (51) | (4,189) |
| Tennessee |
160,187 |
11.6% | 6,475 | 5,718 |
| Texas | 280,564 | 6.7% | 593 | (19,082) |
| Utah | 42,243 | 7.8% | 1,676 | (7,799) |
| Vermont | 1,813 | 6.0% | 410 | 177 |
| Virginia | 93,574 | 7.5% | (2,180) | (8,100) |
| Washington | 109,182 | 6.2% | (9,812) | (51,744) |
| West Virginia | 4,694 | 11.1% | 825 | 869 |
| Wisconsin | 87,994 | 11.5% | 194 | (743) |
| Wyoming | 1,152 | 3.7% | (9) | (76) |
Q22016 Equity Rich Data by State
| State | Equity Rich(LTV 50 or lower) | Pct Equity Rich | QoQ Change in Count | YoY Change in Count |
| United States | 12,383,345 | 22.1% | 47,694 | 1,420,304 |
| Alabama | 55,454 | 15.2% | 1,317 | 5,879 |
| Alaska | 13,137 | 18.5% | (3,590) | (400) |
| Arizona | 387,155 | 21.1% | 11,977 | 70,855 |
| Arkansas | 35,939 | 15.5% | (108) | 2,319 |
| California | 2,789,106 | 34.3% | 74,130 | 455,916 |
| Colorado | 339,998 | 25.7% | 18,747 | 97,147 |
| Delaware | 39,190 | 18.0% | (2,347) | 1,123 |
| District of Columbia | 34,409 | 26.5% | (1,561) | (31,010) |
| Florida | 1,240,812 | 22.1% | 51,044 | 277,543 |
| Georgia | 255,426 | 16.1% | 1,047 | 29,343 |
| Hawaii | 99,850 | 36.4% | (552) | 7,154 |
| Idaho | 31,134 | 18.9% | 1,665 | 7,719 |
| Illinois | 353,744 | 13.2% | 2,829 | 16,640 |
| Indiana | 56,821 | 11.8% | (3,790) | (1,556) |
| Iowa | 41,510 | 14.9% | (3,398) | 1,867 |
| Kansas | 1,739 | 19.3% | 214 | (2,462) |
| Louisiana | 40,573 | 14.1% | (1,353) | 4,798 |
| Maryland | 240,650 | 15.6% | (7,653) | 739 |
| Michigan | 292,891 | 18.1% | (7,415) | 21,729 |
| Minnesota | 152,327 | 20.2% | (793) | 11,193 |
| Mississippi | 3,249 | 10.2% | (390) | (203) |
| Missouri | 128,491 | 13.8% | (7,370) | 6,786 |
| Montana | 15,437 | 23.9% | (2,128) | 1,490 |
| Nebraska | 38,612 | 14.6% | (1,201) | 3,379 |
| Nevada | 128,568 | 16.6% | 468 | 29,405 |
| New Hampshire | 54,228 | 20.0% | (2,802) | 1,311 |
| New Jersey | 371,970 | 20.9% | (28,792) | (13,161) |
| New Mexico | 49,135 | 18.6% | (4,848) | 8,205 |
| New York | 710,861 | 32.2% | (15,296) | (94,524) |
| North Carolina | 285,110 | 16.8% | 2,698 | 27,988 |
| North Dakota | 6,979 | 22.4% | (415) | 746 |
| Ohio | 311,784 | 13.0% | (2,792) | 17,264 |
| Oklahoma | 76,806 | 14.4% | (1,614) | 5,194 |
| Oregon | 244,446 | 27.6% | 11,692 | 8,561 |
| Pennsylvania | 454,941 | 20.6% | (2,775) | 14,308 |
| Rhode Island | 56,242 | 22.0% | 544 | 5,609 |
| South Carolina | 150,215 | 17.7% | (1,659) | 10,027 |
| Tennessee | 273,725 | 19.8% | (263) | 17,970 |
| Texas | 898,182 | 21.3% | 280 | 224,778 |
| Utah | 93,261 | 17.2% | (8,190) | 12,565 |
| Vermont | 8,773 | 29.1% | (1,251) | (210) |
| Virginia | 213,108 | 17.0% | 100 | 7,822 |
| Washington | 459,199 | 26.1% | 36,223 | 119,197 |
| West Virginia | 7,520 | 17.8% | (439) | 153 |
| Wisconsin | 142,697 | 18.6% | (1,031) | 6,136 |
| Wyoming | 7,616 | 24.3% | (1,199) | (701) |
About ATTOM Data Solutions
ATTOM Data Solutions is the curator of the ATTOM Data Warehouse, a multi-sourced national property database that aggregates property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, health hazards, neighborhood characteristics and other property characteristic data for more than 150 million U.S. properties. The ATTOM Data Warehouse delivers actionable data to businesses, consumers, government agencies, universities, policymakers and the media in multiple ways, including bulk file licenses, APIs and customized reports.
ATTOM Data Solutions also powers consumer websites designed to promote real estate transparency: RealtyTrac.com is a property search and research portal for foreclosures and other off-market properties; Homefacts.com is a neighborhood research portal providing hyperlocal risks and amenities information; HomeDisclosure.com produces detailed property pre-diligence reports.
ATTOM Data and its associated brands are cited by thousands of media outlets each month, including frequent mentions on CBS Evening News, The Today Show, CNBC, CNN, FOX News, PBS NewsHour and in The New York Times, Wall Street Journal, Washington Post and USA TODAY.
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