September 17, 2021

MP Now News

Mortgage News

Fewer than 5 Percent of Homes Remain Underwater

Thanks to rising home prices. hardly any homeowners find themselves under water focus on their mortgages and the few who do it in a few towns and cities. In fact, ATTOM says more than a third of the mortgaged homes in the country are considered “equity rich” with a combined mortgage lending value (CLTV) of less than 50 percent. The 34.4 percent of homeowners in this category are up from 31.2 percent in the previous quarter and 27.5 percent in the second quarter of 2020.

The company shows in its US Home Equity and Underwater Report for the second quarter that in the second quarter of 2021 only 4.1 percent of mortgaged homes, or one in 24, were considered seriously underwater. These homes had a CLTV of at least 25 percent more than the estimated market value of the property. That was 5.2 percent of all US homes with mortgage loans in the previous quarter and 6.2 percent, or one in 16 homes a year ago.

In 48 states, the number of well-funded homes and serious underwater decline increased from the first to the second quarter. All 50 had such a year-over-year increase. The equity increases in the second quarter came when average home prices rose 11 percent quarterly and 22 percent annualized nationwide in the second quarter.

“The huge leaps in house prices over the past year that have helped millions of sellers make big profits too Made it big for other owners in the second quarter who have improved their typical equity ratio more than ever in the past two years, “said Todd Teta, ATTOM’s chief product officer across the country. There are still many questions about the near future of the US real estate market, some of which are related to it how well the economy is recovering from the pandemic, others are not. We will continue to monitor these closely, but right now there are few assets that give as much as home ownership. “

Nine of the top 10 states in terms of equity home growth were in the west and northeast. In Arizona, that percentage jumped from 16.3 percent in the first quarter to 39.7 percent in the second. In each of the three neighboring states of New England, the increase was about 16 percentage points compared to the previous quarter. Massachusetts, New Hampshire and Rhode Island all ended the second quarter with just over 41 percent of their home equity mortgages.

Maryland (from 23.5 percent to 23.2 percent), West Virginia (unchanged 19.8 percent), Nebraska (unchanged 27.1 percent), Alaska and Montana recorded the lowest increases and partial losses in the proportion of equity-rich homes less than 1 point to 22.9 and 40.8 percent respectively

The decline in the proportion of underwater homes was greatest in Tennessee, Alabama, and Delaware, each falling about 6 points into the single digits, while the proportion rose most in West Virginia, from 10.3 percent to 11.7 percent. There were also slight increases in New Hampshire, Hawaii, New York and Utah, but all remained below 5 percent.

Equity-rich properties dominated in the west, with Idaho, California leading the way at over 50 percent, though Vermont was also above that mark. The proportions were lowest in the Midwest and South, which also led the way in the percentage of underwater real estate.

All but one of the 106 metropolitan regions analyzed (99 percent) showed an increase in the proportion of equity-rich apartments from the first quarter of 2021 to the second quarter of 2021, while all 106 improved compared to the previous year. The largest concentration of high equity real estate was in the San Francisco Bay Area, California.

When it comes to the concentrations of underwater homeowners that we mentioned at the beginning of this article, no one can beat Ohio. ATTOM says there were 33 counties in the United States where at least 25 percent of the land was seriously flooded. Most of these zip codes were in Cleveland, Akron, and Toledo.