Real Estate Marketing & Beyond
Housing data from RealtyTrac shows that the number of homes considered to be “seriously underwater”, or at least 25 percent underwater, has fallen to 6.9 million in the third quarter – representing 12.7 percent of all properties with an existing mortgage.
While that's still a huge number of properties, the situation is improving overall, RealtyTrac revealed in its Q3 2015 U.S. Underwater & Home Equity Report. It notes that the number of seriously underwater homes is down more than half a million from the 7.44 million seriously underwater homes in the previous quarter. The report also notes the number and share of seriously underwater homes peaked in Q2 of 2012 at 12.8 million, representing 28.6 percent of all mortgaged homes.
Daren Blomqvist, vice president at RealtyTrac, said the drop in seriously underwater homes was due to a surge in both home sales volume and prices in the second and third quarters.
“After a lull late last year and early this year, home sales volume and average sales prices picked up dramatically again in the second and third quarters of this year, resulting in a substantial drop in seriously underwater homeowners,” Blomquist explained in a statement.
Looking at the opposite end of the spectrum, RealtyTrac said just over 10.4 million homes, or 19.6 percent of homes with a mortgage, were now considered to be “equity rich”, in other words having at least 50 percent equity. However, that represents a decline from the previous quarter, when RealtyTrac said 10.9 million (19.6 percent) of homes with a mortgage were equity rich.
“On the other hand, the number and share of equity rich homeowners also dropped dramatically between the second and third quarters,” Blomqvist continued. “This follows the trend seen in the previous two quarters — evidence that more homeowners in this category are leveraging their equity through a refinance, move-up sale or by completely cashing out of the housing market.”
Overall, RealtyTrac said that just one in three properties in foreclosure was seriously underwater at the end of Q3. While that may sound like a lot, it's the lowest level since RealtyTrac began tracking in the market in Q1 of 2012, and down from a peak of 62 percent underwater in the second quarter of 2012.
