Underwater Properties Down 291,000 in Q1 From Year Earlier

More than 5.2 million (5,206,446) U.S. properties were seriously underwater with a mortgage at least 25% higher than the property’s estimated market value in the first quarter, down by more than 291,000 properties from a year ago — the smallest year-over-year drop since ATTOM Data Solutions began tracking in Q1 2013.

The 5.2 million seriously underwater properties at the end of Q1 2018 represented 9.5% of all U.S. properties with a mortgage, up from 9.3% in the previous quarter but down from 9.7% in Q1 2017.

“We’ve reached a tipping point in this housing boom where enough homeowners have regained both sufficient equity and sufficient confidence to tap into their home equity — resulting in a noticeably slower decline in seriously underwater properties and slower growth in equity rich properties,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “This tapping of equity could take the form of a cash-out refinance, home equity loan or simply a home sale. We saw the biggest quarterly drop in average home-ownership tenure for homeowners who sold in the first quarter since Q4 2008, evidence that more homeowners are reaching that equity-tapping tipping point more quickly and deciding to sell.”

Properties with 20 to 50% equity down by 1.7 million from year ago
More than 19.5 million (19,513,871) U.S. properties had between 20 and 50% equity (loan-to-value ratio of between 80% and 50%) at the end of Q1 2018, down by 1,714,099 from a year ago, an 8% decrease.

Homes with 20 to 50% equity represented 36.1% of all properties with a mortgage as of the end of Q1 2018, down from 36.3% in the previous quarter and down from 37.6% in Q1 2017.

Equity rich properties represent one in four properties with a mortgage
More than 13.8 million (13,841,082) U.S. properties with a mortgage were equity rich at the end of Q1 2018, up by more than 122,000 from a year ago but still down from a peak of more than 14 million equity rich properties in Q2 2017.

The 13.8 million equity rich properties represented 25.3% of all U.S. properties with a mortgage, down from 25.4% in the previous quarter but still up from 24.3% in Q1 2017.

Highest share of equity rich properties in coastal California, Honolulu, Seattle
States with the highest share of equity rich homes were Hawaii (41.6%); California (41.5%); New York (34.8%); Washington (33.1%); and Oregon (31.8%).

Among 98 metropolitan statistical areas with a population of at least 500,000, those with the highest share of equity rich homes were San Jose, California (66.1%); San Francisco, California (56.0%); Los Angeles, California (45.4%); Honolulu, Hawaii (43.1%); and Seattle, Washington (39.1%).

Highest share of seriously underwater properties in Scranton, Baton Rouge, Youngstown
States with the highest share of seriously underwater homes at the end of Q1 2018 were Louisiana (20.1%); Mississippi (18.0%); Iowa (17.2%); West Virginia (15.9%); and Illinois (15.9%).

Among 98 metropolitan statistical areas with a population of at least 500,000, those with the highest share of seriously underwater homes at the end of Q1 2018 were Scranton, Pennsylvania (21.9%); Baton Rouge, Louisiana (19.9%); Youngstown, Ohio (19.5%); New Orleans, Louisiana (18.5%); and Toledo, Ohio (18.0%).

Along with New Orleans, among 51 metro areas with at least 1 million people, those with more than 13% of seriously underwater properties were Cleveland, Ohio (16.5%); Milwaukee, Wisconsin (16.0%); St. Louis, Missouri (14.7%); Chicago, Illinois (13.8%); Detroit, Michigan (13.6%); Virginia Beach, Virginia (13.4%); and Kansas City, Missouri (13.4%).