U.S. Homeowners Four Times As Likely To Be Equity-Rich Than Seriously Underwater

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Equity-rich Properties in Fourth Quarter of 2019 Comprise 27 Percent of All Mortgaged Homes; Highest Equity Levels Remain in San Francisco Bay Area 

IRVINE, Calif. — Feb. 6, 2020 — ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its fourth-quarter 2019 U.S. Home Equity & Underwater Report, which shows that 14.5 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.

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.

The report also shows that just 3.5 million, or one in 16, mortgaged homes in the fourth quarter of 2019 were considered seriously underwater, with a combined estimated balance of loans secured by the property at least 25 percent more than the property’s estimated market value. That figure represented 6.4 percent of all U.S. properties with a mortgage, down slightly from 6.5 percent in the prior quarter.

“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. That marked yet another sign of how much the country has benefited from an eight-year housing-market boom,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Some big gaps in equity levels persist between regions and market segments. But as home values keep climbing, financial resources keep building for homeowners, which provides them with leverage to make home repairs, help their children through college or take on other major expenses.”

Highest equity-rich shares all in the Northeast and West

The top 10 states with the highest share of equity-rich properties in the fourth quarter of 2019 were all in the Northeast and West regions, led by California (42.8 percent equity-rich), 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 equity-rich), Oklahoma (14.9 percent), Illinois (15.3 percent), Arkansas (16.3 percent) and Alabama (16.5 percent).

Among 107 metropolitan statistical areas analyzed in the report with a population greater than 500,000, those with the highest shares of equity-rich properties were San Jose, CA (65.9 percent equity-rich); San Francisco, CA (57.5 percent); Los Angeles, CA (47.8 percent); Santa Rosa, CA (45.9 percent) and Honolulu, HI (39.3 percent). The leader in the Northeast region was Boston, MA, (35.6 percent) while Dallas, TX, led the South (36.5 percent) and Grand Rapids, MI, led in the Midwest (27.4 percent).

Metro areas with the lowest percentage of equity-rich properties were Baton Rouge, LA (10.8 percent equity-rich); Little Rock, AR (13.4 percent); Tulsa, OK (13.7 percent); Columbia, SC (13.9 percent) and Akron, OH (14.6 percent).

Top equity-rich counties concentrated in California

Among the 1,467 counties with at least 2,500 properties with mortgages in the fourth quarter of 2019, 11 of the top 25 equity-rich locations were in California.

Counties with the highest share of equity-rich properties were San Mateo, CA (73.6 percent equity-rich); San Francisco, CA (70.1 percent); Santa Clara (San Jose), CA (66.9 percent); San Juan, WA (63.5 percent) and Alameda County, CA (outside San Francisco) (57.7 percent).

More than half of all properties were equity-rich in 451 zip codes

Among 8,262 U.S. zip codes with at least 2,000 properties with mortgages in the fourth quarter of 2019, there were 451 zip codes where at least half of all properties with a mortgage were equity rich.

The top 25 were all in California, with most in the San Francisco Bay area. They were led by zip codes 94116 in San Francisco (82.6 percent equity-rich), 94040 in Mountain View (81.7 percent), 94122 in San Francisco (80.6 percent), 94112 in San Francisco (80.1 percent) and 94087 in Sunnyvale (79.5 percent).

Highest seriously underwater shares in the South and Midwest

The top 10 states with the highest shares of mortgages that were seriously underwater in the fourth quarter of 2019 were all in the South and Midwest, led by Louisiana (16.8 percent seriously underwater), Mississippi (16.0 percent), West Virginia (13.9 percent), Iowa (13.5 percent) and Arkansas (12.9 percent).

Among 107 metropolitan statistical areas analyzed in the report with a population greater than 500,000, those with the highest share of mortgages that were seriously underwater included Youngstown, OH (16.2 percent); Baton Rouge, LA (15.9 percent); Scranton, PA (15 percent); Cleveland, OH (13.7 percent) and Akron, OH (13.4 percent).

More than 25 percent of all properties were seriously underwater in 149 zip codes

Among 8,262 U.S. zip codes with at least 2,000 properties with mortgages in the fourth quarter, there were 149 zip codes where at least a quarter of all properties with a mortgage were seriously underwater. The largest number of those zip codes were in the Cleveland, OH; Philadelphia, PA; Milwaukee, WI; Rockford, IL, and St. Louis, MO, metropolitan statistical areas.

The top five zip codes with the highest share of seriously underwater properties were 71446 in Leesville, LA (65.7 percent seriously underwater); 44110 in Cleveland, OH (59.6 percent); 08611 in Trenton, NJ (58.7 percent); 53206 in Milwaukee, WI (58.6 percent) and 44105 in Cleveland, OH (54.2 percent).

Report methodology

The ATTOM Data Solutions U.S. Home Equity & Underwater report provides counts of properties based on several categories of equity — or loan to value (LTV) — at the state, metro, county and zip code level, along with the percentage of total properties with a mortgage that each equity category represents. The equity/LTV is calculated based on record-level loan model estimating position and amount of loans secured by a property and a record-level automated valuation model (AVM) derived from publicly recorded mortgage and deed of trust data collected and licensed by ATTOM Data Solutions nationwide for more than 155 million U.S. properties. The ATTOM Data Solutions Home Equity and Underwater report has been updated and modified to better reflect a housing market focused on the traditional home buying process.  ATTOM Data Solutions found that markets where investors were more prominent, they would offset the loan to value ratio due to sales involving multiple properties with a single jumbo loan encompassing all of the properties. Therefore, going forward such activity is now excluded from the reports in order to provide traditional consumer home purchase and loan activity.

Definitions

Seriously underwater: Loan to value ratio of 125 percent or above, meaning the property owner owed at least 25 percent more than the estimated market value of the property.

Equity-rich: Loan to value ratio of 50 percent or lower, meaning the property owner had at least 50 percent equity.   

About ATTOM Data Solutions

ATTOM Data Solutions provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population. A rigorous data management process involving more than 20 steps validates, standardizes and enhances the data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 9TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, property data APIs, real estate market trends, marketing lists, match & append and introducing the first property data delivery solution, a cloud-based data platform that streamlines data management – Data-as-a-Service (DaaS).

Media Contact:

Christine Stricker

949.748.8428

christine.stricker@attomdata.com

Data and Report Licensing:

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datareports@attomdata.com

Please contact us if you have questions about the underlying data referenced in this article, or would like to have access to that data in the form of custom reports, API, Bulk File or DaaS.

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