Housing boom rescues more than 1M underwater mortgages: report

Skyrocketing prices have reduced the number of “seriously underwater” homes by 34% since 2019

National /
Aug.August 05, 2021 02:21 PM
The number of seriously underwater homes dropped from 3.5 million at the end of 2019 to 2.25 million by the end of 2021’s second quarter. (iStock)

The number of seriously underwater homes dropped from 3.5 million at the end of 2019 to 2.25 million by the end of 2021’s second quarter. (iStock)

A pandemic housing boom that’s driving up home prices across the country has reduced the number of “seriously underwater” mortgages in the U.S. by as much as 34 percent, a new report indicates.

A home-equity report by data firm Attom shows the number of seriously underwater homes — defined as properties with secured loans that are at least 25 percent higher than the home’s market value — has dropped from 3.5 million at the end of 2019 to 2.25 million as of July 1, according to an analysis by Bloomberg News.

Meanwhile, the number of homes that are “equity-rich” — those with market values that are at least double the outstanding loan balance — increased by 4.2 million over the same period and now make up more than one-third of all mortgaged homes nationwide.

The Chicago area saw the biggest decline in underwater properties. The number of seriously underwater homes in the area has fallen by more than 50,000 since the end of 2019, though 7.4 percent remain seriously underwater.

The New York area also saw a major decline, losing 33,467 seriously underwater homes. Just 3 percent of mortgaged homes in the metro area remain seriously underwater, the report indicated.

In Miami, the housing boom has rescued 32,078 homes from seriously underwater status, leaving 3.1 percent of area homes under the classification. Los Angeles lost 19,813 seriously underwater homes, leaving the area with just 1.2 percent of mortgaged homes seriously underwater.

Baton Rouge is currently the leader in debt-trapped homes, with 12.7 percent of mortgages considered to be underwater. The areas with the next-highest shares of seriously underwater homes are New Orleans, Toledo, Ohio and Youngstown, Ohio.

[Bloomberg News] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
    Real estate stocks push up this week as U.S.-China trade tensions ease
    Real estate stocks push up this week as U.S.-China trade tensions ease
    416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
    Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
    Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
    (Getty; Illustration by The Real Deal)
    Agents: Life is good under 7%
    Agents: Life is good under 7%
    (Getty Images)
    Tenants attack landlords in two separate incidents
    Tenants attack landlords in two separate incidents
    One of the two Avalon lots sold to an unnamed businessman (Google Maps)
    Two Jersey Shore lots sell for record $21M
    Two Jersey Shore lots sell for record $21M
    Michael Ovitz looks to flip Greenwich Village condo for $25M
    Michael Ovitz looks to flip Greenwich Village condo for $25M
    Michael Ovitz looks to flip Greenwich Village condo for $25M
    (Getty Images)
    Millions of housing units are needed in the US
    Millions of housing units are needed in the US
    A photo illustration of the proposed Lower Platte River Corridor (Getty, Plan Preserve Play NE)
    Nebraska lawmakers mull digging $1B recreation lake
    Nebraska lawmakers mull digging $1B recreation lake
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...