Seriously Underwater Properties Decline by 12% in 2016: Attom

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Homeowners are reaping the rewards of higher home prices, as the number of seriously underwater properties dropped by 1 million from one year ago, Attom Data Solutions said.

At the end of 2016, there were only 5.4 million properties that were seriously underwater, down 10.8% from the third quarter of 2016 and nearly 12% from the end of 2015. At the same time, the number of equity-rich properties spiked by 1.3 million to 13.9 million, Attom reported.

Equity-rich properties now represent nearly a quarter of all properties with a mortgage in the U.S.

"Since home prices bottomed out nationwide in the first quarter of 2012, the number of seriously underwater U.S. homeowners has decreased by about 7.1 million, an average decrease of about 1.4 million each year," Daren Blomquist, senior vice president with Attom Data Solutions, said in a news release.

"Meanwhile, the number of equity-rich homeowners has increased by nearly 4.8 million over the past three years, a rate of about 1.6 million each year."

Higher home values are fueling the increase. But Attom also found that another contributing factor is tenure — American homeowners had been in their homes for a record 7.88 years on average in 2016. The average tenure between 2000 and 2008 was 4.26 years.

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