IRVINE, Calif. – Feb. 9, 2017 – ATTOM Data Solutions' Year-End 2016 U.S. Home Equity & Underwater Report found 5.4 million U.S. properties seriously underwater at the end of 2016 – a decrease of more than 1 million properties year-to-year. Seriously underwater properties are ones in which the combined mortgage amount is at least 25 percent higher than the property's estimated market value.
The report found that 14.3 percent of Florida homes with a mortgage were seriously underwater; however, it's a marked decline year-to-year. At the end of 2015, 19.8 percent of Florida homes with a mortgage were seriously underwater, or about one in five.
While Florida cities continue to face challenges, they no longer hold many of the top positions in ATTOM's study. None received a ranking in any of the study's "top 5" or "bottom 5" results, and only two cities received a mention under "other metro areas with at least 1 million people and at least 14.5 percent of properties seriously underwater": Orlando got a mention with 15.7 percent and Jacksonville with 14.5 percent.
Along with Las Vegas and Cleveland, other metro areas with at least 1 million people and at least 14.5 percent of properties seriously underwater at the end of 2016 were Detroit (17.5 percent); Chicago (16.9 percent); Orlando (15.7 percent); Memphis (14.6 percent); and Jacksonville, Florida (14.5 percent).
"Since home prices bottomed out nationwide in the first quarter of 2012, the number of seriously underwater U.S. homeowners has decreased by about 7.1 million – an average decrease of about 1.4 million each year," says Daren Blomquist, senior vice president with ATTOM Data Solutions. "Meanwhile, the number of equity-rich homeowners has increased by nearly 4.8 million over the past three years – a rate of about 1.6 million each year.
Blomquist notes a "massive loss of home equity during the housing crisis" that forced many owners to stay in their homes longer and "effectively disrupted the historical domino effect of move-up buyers that feeds both demand for new homes and supply of inventory for first-time homebuyers. Between 2000 and 2008, our data shows the average homeownership tenure nationwide was 4.26 years, but that average tenure has been trending steadily higher since 2009, reaching a new record high of 7.88 years for homeowners who sold in 2016."
The report found that, as of the end of 2016, 13.9 million (13,877,315) U.S. properties were equity rich, in which the combined loan amount secured by the property was 50 percent or less of the property's estimated market value – an increase of nearly 1.3 million year-to-year.
The 13.9 million equity-rich properties at the end of 2016 represented 24.6 percent of all U.S. properties with a mortgage, up from 23.4 percent at the end of Q3 2016 and up from 22.5 percent at the end of 2015.
- States with highest share of seriously underwater properties: Nevada (19.5 percent), Illinois (16.6 percent), Ohio (16.3 percent), Missouri (14.6 percent) and Louisiana (14.5 percent)
- Among 88 metropolitan statistical areas, those with the highest share of seriously underwater properties: Las Vegas (22.7 percent), Cleveland (21.5 percent), Akron, Ohio (20.1 percent), Dayton, Ohio (20.0 percent) and Toledo, Ohio (19.9 percent)
- States with the highest share of equity-rich properties at the end of 2016: Hawaii (37.8 percent), Vermont (36.9 percent), California (36.0 percent), New York (34.9 percent) and Oregon (32.0 percent)
- Among 88 metropolitan statistical areas, those with the highest share of equity-rich properties: San Jose, California (51.6 percent), San Francisco (47.7 percent), Honolulu (39.8 percent), Los Angeles (39.2 percent) and Pittsburgh, Pennsylvania (35.8 percent).
- 19.4 percent of non-owner occupied (investment) properties with a mortgage were underwater as of the end of 2016 compared to only 6.8 percent of owner-occupied properties.
- 12.6 percent of properties in high-risk flood zones were seriously underwater (above national average of 9.6 percent).
- Based on years owned range, the highest share of underwater properties is those that have been owned between 10 and 15 years (12.0 percent), followed by those that have been owned five to 10 years (10.6 percent). The lowest share of seriously underwater properties were those owned more than 20 years (7.2 percent) followed by those owned between one and five years (8.6 percent).
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