Mortgage equity report finds fewer homeowners underwater

Rising equity levels lifted borrowers across both ends of the spectrum, according to a second quarter report from Attom Data Solutions.

The number of equity-rich mortgaged homes — those with combined loan-to-value ratios of 50% or less — totaled a little under 15.2 million for the second quarter and made up 27.5% of all loans. This compared with nearly 14.5 million and 26.5% one quarter prior.

The opposite pole of the market made similar strides. A shade over 3.4 million homes had a CLTV ratio of 125% or more, equal to 6.2% of all mortgaged properties. These seriously underwater homes dropped from 3.6 million and 6.6% in the opening quarter of 2020.

"Homeowners saw their equity rise far and wide throughout the United States during the second quarter of this year in yet another sign of the housing market punching back against the coronavirus pandemic. More property owners rose into equity-rich territory and escaped the seriously underwater lane, putting more money into the average household," Todd Teta, Attom's chief product officer, said in a press release.

California led all states by share of equity-rich loans at 43%. Vermont (39.1%), Hawaii (38.6%), Washington (38.1%) and Idaho (35.4%) rounded out the top five. The West coast dominated at the metro level, with San Jose, Calif. (64%), San Francisco (56.5%), Los Angeles (47.9%), Santa Rosa, Calif. (45.3%) and Seattle (40.9%) leading all housing markets.

The second quarter's top five seriously underwater states all came from the middle section of the country. Louisiana topped that list, with 16.4% of mortgaged properties seriously underwater, followed by Mississippi (15%), Iowa (13.9%), West Virginia (13.8%) and Arkansas (12.4%). For metro areas, Youngstown, Ohio had the highest share of seriously underwater homes at 15.7%, then came Baton Rouge, La., at 15.5%, Syracuse, N.Y., at 14.1%, Scranton, Pa., at 14% and Toledo, Ohio at 12.8%.