On the heels of our first-ever Agent Appreciation month, Inman is leaping into February with our Residential Finance theme month. Join us as we investigate how buying and selling a home is changing, from companies backing consumers in new ways to integrated services that handle the entire transaction.
In the United States, 14.5 million residential properties — or 26.7 percent of mortgaged homes — were considered equity-rich in the final quarter of 2019, according to Attom Data Solutions’ fourth-quarter 2019 U.S. Home Equity & Underwater Report.
In order to be considered equity-rich, the combined estimated amount of loans secured by those properties had to be 50 percent or less of their estimated market value. This percentage remained the same from results in the third quarter of 2019.
One in 16 mortgaged homes (3.5 million) in the fourth quarter were well underwater with combined estimated loan balances on a property at least 25 percent greater than the property’s estimated market value. That amount declined slightly from the previous quarter, representing 6.4 percent of U.S. mortgaged properties compared to the previous quarter’s 6.5 percent.
“Homeownership continued boosting household balance sheets across the United States in the fourth quarter of 2019, as people paying off mortgages were much more likely to be in equity-rich territory than seriously underwater,” said Todd Teta, Attom’s chief product officer. “That marked yet another sign of how much the country has benefited from an eight-year housing-market boom.”
Overall, the highest equity-rich shares spanned in areas in the Northeast and West — California led with 42.8 percent equity-rich shares, followed by Vermont (39.2 percent), Hawaii (38.8 percent), Washington (35.4 percent) and New York (35.1 percent).
Louisiana (13.6 percent equity-rich), Oklahoma (14.9 percent), Illinois (15.3 percent), Arkansas (16.3 percent) and Alabama (16.5 percent) all held the lowest percentage of equity-rich properties.
San Jose, California (65.9 percent equity-rich); San Francisco, California (57.5 percent); Los Angeles, California (47.8 percent); Santa Rosa, California (45.9 percent) and Honolulu, Hawaii (39.3 percent) were the metro areas (with a population greater than 500,000) analyzed in the report that achieved the highest shares of equity-rich properties.
The top 25 equity-rich U.S. zip codes with at least 2,000 mortgaged properties were all in California, and most were in the San Francisco Bay area.
States in the South and Midwest held the highest shares of mortgages seriously underwater during this quarter, with Louisiana reaching the highest share at 16.8 percent seriously underwater. Mississippi (16.0 percent seriously underwater), West Virginia (13.9 percent), Iowa (13.5 percent) and Arkansas (12.9) immediately followed.
Youngstown, Ohio, was the metropolitan area that held the highest share of mortgages seriously underwater at 16.2 percent, with Baton Rouge, Louisiana (15.9 percent); Scranton, Pennsylvania (15 percent); Cleveland, Ohio (13.7 percent); and Akron, Ohio (13.4 percent) not far behind.
The greatest number of zip codes that contained at least a quarter of all mortgaged properties that were seriously underwater were in Cleveland, Ohio; Philadelphia, Pennsylvania; Milwaukee, Wisconsin; Rockford, Illinois; and St. Louis, Missouri metropolitan areas.