Bank of America head of consumer lending Steve Boland breaks down the 2019 homebuyer insights report.
The fortunes of American homeowners are getting bigger.
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Only 3.5 million homes with mortgages in the U.S., roughly one in 15, were “seriously underwater” in the fourth quarter of 2019, according to data published by the California-based ATTOM Data Solutions released Thursday. That means what is still owed on the mortgage is at least 25 percent higher than the estimated value of the property.
The number represents a marked turnaround from 2012 (the same year ATTOM began tracking the data) when the housing market was still in the throes of the financial crisis. At the time, close to 12 million homes were “seriously underwater.”
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Meanwhile, about one-quarter of mortgaged homes, representing about 14.5 million, were “equity rich,” meaning the loan value was 50 percent or lower than the estimated market value, according to the data. That’s up from close to 10 million in 2012.
“Homeownership continued boosting household balance sheets across the U.S. 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 Seta, ATTOM Data Solution chief product officer. “That marked yet another sign of how much the country has benefited from an eight-year housing-market boom.”
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Still, the percentage of “equity-rich” residential properties drastically varied by state: California had the highest share of “equity-rich” homes at 42.8 percent, followed by Vermont (39.2 percent), Hawaii (38.8 percent), Washington (35.4 percent) and New York (35.1 percent).
States with the lowest percentage of equity-rich properties were Louisiana (13.6 percent), Oklahoma (14.9 percent), Illinois (15.3 percent), Arkansas (16.3 percent) and Alabama (16.5 percent). Unsurprisingly, a number of those states, including Louisiana and Arkansas, also had the highest share of “seriously underwater” mortgages.
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The count of equity-rich properties in the fourth quarter of 2019 represented 26.7 percent, or about one in four, of the 54.5 million mortgaged homes in the U.S. That percentage was unchanged from the third quarter of 2019.
