ATTOM Data Solutions released its Q2 2016 U.S. Home Equity and Underwater Report, which shows 11.9 % of all U.S. properties with a mortgage at the end of second quarter 2016 were seriously underwater – a drop from 13.3 % in Q2 2015.
No Florida city made ATTOM’s list of the U.S. seriously underwater cities, though a handful of have more than 15 % of owners having a mortgage still in trouble. They include Orlando (19.1 %), Tampa-St. Petersburg (17.8%t) and Miami (17.3 %).
“South Florida continues to see’s an equity improvement higher 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 in excess of 1,400 U.S. counties accounting for 88% of the U.S. population in conjunction with automated valuation models (AVMs) in excess of 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 volume of seriously underwater U.S. properties (those with a loan-to-value ratio or LTV of 125% or higher) decreased by 37,235 in comparison to the first quarter and decreased by 776,958 when compared to a year ago. Ever since the peak of 12.8 million in Q2 2012, the volume of seriously underwater properties has decreased by more than 6.1 million.
About 22.1% of all U.S. properties with a mortgage at the end of Q2 2016 were equity rich (LTV of 50% or less – up from 22% in the previous quarter and 19.6 % in Q2 2015. The number of equity rich properties increased by more than 1.4 million compared to 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 supply a profile of the who, what, when, where and why for seriously upside down properties:
Property value: 34.4% of properties having an estimated market value up to $100,000 are seriously underwater compared to just 4.9 % of properties with an estimated market value above $750,000.
Loan vintage: 26.4% of properties with a loan originated between 2004 and 2008 are seriously underwater compared to 8.3% with a loan originated since 2009.
Occupancy status: 21.8% of non-owner occupied properties are seriously underwater compared to 9.1 percent of occupied properties.
Ownership type: 43.5% of properties owned by a Company/Corporation/Incorporated owner are seriously underwater compared to 10.1% of properties belonging to a a married couple.
Property tax rate: 21.4% of properties with an effective property tax rate above 2% of market value are seriously underwater, compared to 11.8% of properties with an effective property tax rate below 1 %.
Political party: 13.1 % of properties found in a congressional district having a Democrat representative are seriously underwater in comparison to 10.8% seriously underwater in a congressional district that has a Republican representative.
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