Currently Reading

Increasing Home Values Lift 1 Million Homes from 'Underwater' Status

Advertisement
Economics

Increasing Home Values Lift 1 Million Homes from 'Underwater' Status


August 6, 2021
house exterior
Photo: karamysh | stock.adobe.com

Home value increases have taken more than 1 million homes out of an “underwater” status, meaning the loans secured by the property were 25% higher than the home’s market value. Now, with home values up, there remains 2.25 million underwater homes, but it’s down from 3.5 million at the end of 2019. Chicago, Philadelphia, and New York experienced the largest declines in underwater homes during that period, reports National Mortgage News. On the flip side, “equity-rich” homes that have a value at least double the loan balance, increased by 4.2 million.

They now account for 34.4% of all mortgaged properties, up from 26.7% at the end of 2019.

“Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country,” said Todd Teta, chief product officer at Attom.

After the 2008 crash, borrowers across the country were left owning property that was worth much less than what they’d borrowed to buy it, leading to an extended foreclosure crisis in which millions of Americans were thrown out of their homes.

In the pandemic, the government imposed a moratorium on foreclosures. That measure expired on July 31, but the rapid increase in housing prices while it was in force means that many struggling homeowners may now be able to sell their property for a gain and avoid foreclosure. Median home prices nationwide were up 22% from a year earlier in the second quarter, according to Attom.

There remain pockets of the country where housing debt-traps are widespread. The major metro areas with the highest share of underwater mortgages include Baton Rouge (which topped the list at 12.7%) and New Orleans in Louisiana, and Toledo and Youngstown in Ohio.

At a more granular level, there are three zip codes in the Cleveland area where roughly half of all homes still have negative equity.

Read More
 

Related Stories

Economics

Economic Recovery Delayed by Inflation and Labor and Supply Constraints

Why the national economy is seeing its slowest growth since the start of the pandemic

Economics

Slow Economic Growth Reported for the Third Quarter of 2021

Real GDP growth rate sees yet another negative gain

Market Data + Trends

Rising Interest Rates Cause Drop in Mortgage Originations

Why mortgage bankers might be seeing a lot less business.

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.