The number of homes underwater, where the homeowner owes more than what the home is worth, decreased slightly due to rising home prices, according to the Q2 2016 U.S. Home Equity Report from ATTOM Data Solutions, a source for housing data and the new parent company of RealtyTrac.
In the second-quarter report, 6.6 million properties were seriously underwater, an 11.9% share of total properties at the end of the second quarter. This is down from 12% in the first quarter, and 13.3% last year.
For the report, ATTOM analyzed recorded mortgage and deed of trust data from more than 1,400 counties accounting for 88% of the U.S. population.
“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, ATTOM Data Solutions senior vice president.
“Nationwide home prices reached a new all-time high in June on the heels of 52 consecutive months of annual increases,” Blomquist said.
Home prices increased yet again in the second quarter, outpacing wage growth, according to the latest quarterly report by the National Association of Realtors.
The number of seriously underwater properties in the second quarter of 2012, 12.8 million, has decreased by more than 6.1 million, the report stated.
The number of equity-rich properties increased to 22.1% of all properties in the second quarter, up from last quarter’s 22% and last year’s 19.6%.
“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,” Blomquist said.
Among the 88 metros analyzed for the report with a population of at least 500,000 and sufficient data, the market with the highest share of underwater properties was Cleveland, Ohio, at 27.5%. Las Vegas came in second with a 25.7% share, followed by Akron, Ohio, at 24.9%, Dayton, Ohio, at 24.1% and Toledo, Ohio, at 23.6%.
In response to the existing underwater homes, RealtyTrac created an infographic that shows why so many remain underwater despite rapidly rising home prices.
The metro with the lowest share of seriously underwater homes is San Jose, California, at 1.7%. San Francisco came in second with a share of 3.7%, followed by Portland, Oregon, at 3.9%, Austin, Texas, at 3.9% and Oxnard-Thousand Oaks-Ventura, California at 4.1%.
Of course, this doesn’t come as much of a surprise as the median single-family home price in San Jose just increased to more than $1 million.