IRVINE, Calif. – Aug. 11, 2016 – ATTOM Data Solutions released its Q2 2016 U.S. Home Equity and Underwater Report, which shows 11.9 percent of all U.S. properties with a mortgage at the end of second quarter 2016 were seriously underwater – a drop from 13.3 percent in Q2 2015.
No Florida city made ATTOM’s list of the U.S. seriously underwater cities, though a few have more than 15 percent of owners with a mortgage still underwater. They include Orlando (19.1 percent underwater), Tampa-St. Petersburg (17.8 percent) and Miami (17.3 percent).
“South Florida continues to see an equity improvement greater than the national average due to our strong growth,” says Mike Pappas, CEO and president at the Keyes Company. “Our underwater homes saw a 3-times improvement over the average with the high equity owners experiencing a 1.8-times improvement. With our limited land and strong in-migration, we will continue to see improvement in equity.”
For the report, ATTOM analyzed recorded mortgage and deed of trust data from more than 1,400 U.S. counties accounting for 88 percent of the U.S. population along with automated valuation models (AVMs) for more than 56 million properties with mortgages in those counties.
“Rising home prices are lifting all home equity boats: bailing out seriously underwater homeowners and enriching homeowners who already have positive equity,” said Daren Blomquist, senior vice president at ATTOM Data Solutions (the new parent company of RealtyTrac). “Nationwide home prices reached a new all-time high in June on the heels of 52 consecutive months of annual increases. While that national trend is consistent in most markets across the country, there are still some local markets and sub-markets that have been largely left behind by the housing recovery and which still have a high percentage of underwater homeowners.”
The number of seriously underwater U.S. properties (those with a loan-to-value ratio or LTV of 125 percent or more) decreased by 37,235 compared to the first quarter and decreased by 776,958 compared to a year ago. Since the peak of 12.8 million in Q2 2012, the number of seriously underwater properties has decreased by more than 6.1 million.
About 22.1 percent of all U.S. properties with a mortgage at the end of Q2 2016 were equity rich (LTV of 50 percent or less – up from 22.0 percent in the previous quarter and 19.6 percent in Q2 2015. The number of equity rich properties increased by more than 1.4 million compared to a year ago.
Profile of seriously underwater properties
ATTOM matched home equity data against property and ownership characteristic data – including occupancy status, market value, property tax rate, ownership description and congressional district – to provide a profile of the who, what, when, where and why for seriously underwater properties:
- Property value: 34.4 percent of properties with an estimated market value up to $100,000 are seriously underwater compared to just 4.9 percent of properties with an estimated market value above $750,000.
- Loan vintage: 26.4 percent of properties with a loan originated between 2004 and 2008 are seriously underwater compared to 8.3 percent with a loan originated since 2009.
- Occupancy status: 21.8 percent of non-owner occupied properties are seriously underwater compared to 9.1 percent of occupied properties.
- Ownership type: 43.5 percent of properties owned by a Company/Corporation/Incorporated owner are seriously underwater compared to 10.1 percent of properties owned by a husband and wife.
- Property tax rate: 21.4 percent of properties with an effective property tax rate above 2 percent of market value are seriously underwater, compared to 11.8 percent of properties with an effective property tax rate below 1 percent.
- Political party: 13.1 percent of properties located in a congressional district with a Democrat representative are seriously underwater compared to 10.8 percent seriously underwater in a congressional district with a Republican representative.
© 2016 Florida Realtors®