Housing data analysis provider ATTOM Data Solutions released its U.S. Home Equity & Underwater Report for the first quarter of 2017 and revealed that over 5.5 million US properties are currently underwater. But it’s not all bad news. The data also reported the decrease in the number of homes with less equity compared to the same period last year.
A bird’s eye view
To put things in perspective, the 5.5 million represents the 9.7 percent of all properties in the country with a mortgage. This is a 0.1 increase from the last quarter, but down from the same quarter of 2016 which recorded 12 percent.
Overall, the trend is looking good, but what the analysts are worried about is the uneven distribution of the numbers. Many of the underwater properties are concentrated in “often-overlooked pockets of the housing market” such as those in Las Vegas and central Florida. About a third of homes that cost below $100,000 are also underwater.
The drag in overall home values are attributed to the increase in the share of distressed sales, which could possibly be driven by the increase in underwater properties in the first quarter.
- States with the highest count of properties that are underwater are Nevada, Ohio, Illinois, Louisiana, and Missouri.
- Metros with the most increase in the number of reported underwater properties are Baltimore (Maryland) with 26,974, Philadelphia (Pennsylvania) with Philadelphia, and McAllen (Texas) with 7,746.
- The number of properties rich in equity increased by 1.4 million compared to a year ago.
- States with the highest share of equity-rich properties are Hawaii, California, New York, Vermont, and Oregon.
How do those underwater properties differ from properties that have positive equity? The report also released a detailed profiling of the property types as of the end of 2016.
>> Underwater (5.4 million)
- 19.5 percent are non-owner occupied while 7 percent are occupied
- About 30.8 percent of homes valued at $100,000 or less are seriously underwater; 9.3 percent for homes valued between $100,000 and $300,000; 5 percent for properties that cost between $300,000 and $750,000 in the market; while 4.8 percent of those valued at $750,000 or higher are in trouble
- 9.6 percent of properties in relatively safer areas are underwater compared to the 12.5 percent in flood-risk zones
>> Equity-Rich (13 million)
- 26.7 percent of equity-rich properties are non-owner occupied while 23.6 percent are owner-occupied
- About 15.4 percent of properties valued at $100,000 have positive equity; 20.8 percent for properties costing $100,000 to $300,000; 29.5 for properties that cost between $300,000 and $750,000; and 43.7 percent for properties with a market value of $750,000.
- 13 percent of properties in relatively safer areas are equity-rich compared to the 16.4 percent in flood-risk zones