As South Florida’s home prices continue to rise, fewer property owners’ mortgages are falling under water.
A new report from real estate research firm RealtyTrac shows South Florida’s seriously underwater mortgage rate fell below 19 percent during the first quarter of 2016.
Underwater mortgages are when a homeowners has a loan balance higher than the value of the property. RealtyTrac only looks at homes where the mortgage balance is 125 percent higher than the value of the property that secures it.
The report shows that of all South Florida’s home loans, 18.5 percent were seriously underwater during the first quarter. That’s a slight dip from the 19.6 percent rate from the fourth quarter, and it marks a 4.2 percentage point drop from the first quarter 2015 rate.
During the housing crash, foreclosures and underwater mortgages became commonplace in South Florida’s real estate market. Plummeting property values caused many homeowners to fall under water with their loans, with the rate peaking at 29 percent during the second quarter of 2012.
Then, in 2013 and 2014, home values rocketed upward at double-digit rates as the market bounced back. Today, home prices are still growing at a steady clip, although recent reports show that growth might have already started to curb.
Nationwide, the underwater mortgage rate was 12 percent during the first quarter, down from 13.2 percent the year prior. — Sean Stewart-Muniz