The number of mortgages underwater across the U.S. has dropped markedly, while the amount of “equity-rich” properties has jumped, according to recent housing data.
Real estate data firm ATTOM said in a Thursday report that “just 4.1 percent of mortgaged homes, or one in 24, were considered seriously underwater in the second quarter of 2021.”
An “underwater” mortgage is one in which the mortgage itself is worth more than the property it was taken out on.
The current underwater rate “was down from 5.2 percent of all U.S. properties with a mortgage in the prior quarter and 6.2 percent, or one 16 properties, a year ago,” ATTOM said.
The company also noted that “equity rich” homes—those in which “the combined estimated amount of loans secured by those properties was no more than 50 percent of their estimated market value”—also spiked this quarter.
“The portion of mortgaged homes that were equity-rich in the second quarter of 2021 – one in three – was up from 31.2 percent in the first quarter of 2021 and from 27.5 percent in the second quarter of 2020,” the report said.