Homes with serious negative equity
numbers have now declined to the lowest point in at least two years RealtyTrac
said today. The company, which began
tracking so-called underwater properties in the first quarter of 2012,
estimates that in the first quarter of 2014 9.1 million U.S. homes had loan balances
at least 25 percent higher than the properties market value or a loan-to-value
ratio (LTV) of 125 percent. This is 17
percent of all U.S. properties with a mortgage.
In the fourth quarter of 2013 RealtyTrac
said there were 9.3 million properties or 19 percent of mortgaged homes that
were that seriously underwater and in the first quarter 2013 there were 10.9
million or 26 percent. The recent peak in negative equity was the second quarter of
2012, when 12.8 million U.S. residential properties representing 29 percent of
all properties with a mortgage were seriously underwater.
the rapid growth of home values in 2013 another 8.5 million homes were close emerging
into positive territory in the first quarter with between 90 percent and 110
percent loan-to-value ratios. That
near-equity group represented 16 percent of mortgaged homes and had grown from
8.3 million properties in the fourth quarter of 2013.
“U.S. homeowners are continuing to
recover equity lost during the Great Recession, but the pace of that recovering
equity slowed in the first quarter, corresponding to slowing home price
appreciation,” said Daren Blomquist, vice president at RealtyTrac. “Slower
price appreciation means the 9 million homeowners seriously underwater could
still have a long road back to positive equity.
percentage of properties in foreclosure that had negative value declined from
48 percent in the fourth quarter to 45 percent in the first while those with positive
equity increased to 35 percent from 31 percent.
“The relatively high percentage of
foreclosures with equity is surprising to many because it would seem homeowners
with equity could easily avoid foreclosure by leveraging that equity by
refinancing or with an equity sale of the home,” Blomquist noted. “But many
distressed homeowners with equity may not realize they have equity and in some
cases have vacated the property already, assuming that foreclosure is
The states with the highest
percentage of residential properties seriously underwater in the first quarter
were Nevada (34 percent), Florida (31 percent), Illinois (30 percent), Michigan
(29 percent), and Ohio (27 percent). The
metro areas with high levels of negative equity were Las Vegas (37 percent),
Lakeland, Florida., (36 percent), Palm Bay-Melbourne-Titusville, Florida (35
percent), Cleveland (35 percent), Akron (34 percent), and Detroit (33 percent).
the company refers to as “equity-rich properties,” those with a least 50
percent equity, now total 9.9 million or 19 percent of mortgaged properties
compared to 9.1 million or 18 percent in the fourth quarter of 2013. The metro areas with the highest percentage
of equity rich homes were San Jose, (39 percent), Honolulu (35 percent), San
Francisco (35 percent), Poughkeepsie, (34 percent), and Los Angeles (32