Equity Gains for 2015

January 29, 2016

More home owners are unlocking equity, which has pushed the number of underwater properties nationwide to about half of the peak reached in the second quarter of 2012, RealtyTrac reports in its Year-End 2015 U.S. Home Equity & Underwater Report.

By the end of 2015, about 6.4 million homes – or 11.5 percent of all properties with a mortgage -- were considered “seriously underwater” – in which the loan amount is at least 25 percent higher than the property’s estimated market value. That marks half the 12.8 million –or 28.6 percent of all properties – of seriously underwater properties in the peak of the second quarter of 2012, RealtyTrac reports.

“Over the past three and a half years, the number of seriously underwater properties has been cut in half, but we continue to deal with a long tail of seriously underwater properties, and it will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” says Daren Blomquist, vice president at RealtyTrac. “At the other end of the spectrum, the growing number of equity rich properties reflects a moribund move-up market and restrained leveraging of home equity by U.S. home owners.”

By the end of 2015, about 12.6 million properties – or 22.5 percent of all properties with a mortgage -- were considered “equity rich,” having at least 50 percent equity.

What’s more, also by the end of 2015, 49.7 percent of all homes in foreclosure had at least some equity – a record high since RealtyTrac began tracking in the third quarter of 2013.

Tracking the Highs

The following markets – with a population of at least 500,000 -- had the highest share of seriously underwater properties at the end of 2015:

  • Las Vegas, Nev.: 27.7%
  • Lakeland, Fla.: 24.4%
  • Cleveland: 24.2%
  • Akron, Ohio: 22.5%
  • Orlando, Fla.: 22.2%

On the other hand, the following markets had the highest share of “equity rich” properties as of the end of 2015:

  • San Jose, Calif.: 53.7%
  • San Francisco: 47.6%
  • Honolulu, Hawaii: 36.7%
  • Los Angeles: 35.8%
  • Pittsburgh, Pa.: 35%

Source:  RealtyTrac