Number of seriously underwater homes increases

Seriously underwater homes increase

A new RealtyTrac report shows that 13.2 percent of all mortgaged properties are seriously underwater, almost 7.4 million properties.

Over the last three months the number of seriously underwater homeowners rose 0.4 percent over the previous quarter, the first quarter over quarter increase since the spring of 2012.

The firm defines seriously underwater as loans where the combined loan amount secured is a minimum of 25 percent higher than the property's estimated market value.

Unsurprisingly, the percentage of loans seriously underwater is higher for loans originating during the bubble years of 2004 to 2008, according to the report.

RealtyTrac vice president Daren Blomquist said that the last quarter of 2014 showed the lowed share of seriously underwater homes since the firm began tracking that data, but as home price appreciation continued to slow in several markets, those 2014 numbers could not be maintained. 

"Most of the seriously underwater homeowners are still stuck in their homes as short sales and other foreclosure alternatives lose momentum, tilting the national home equity scales back slightly toward a higher share of negative equity," Blomquist said.

Breaking out loans by property type, single family homes were at 11.9 percent seriously underwater, condos came in at 16.6 percent and multi-family homes had 21.8 percent. Those percentages increased for distressed properties — those in some state of foreclosure — with 42.6 percent of condos seriously underwater, followed by single family homes at 34.8 percent and multi-family homes at 30.4 percent.

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