There were 1.4 million fewer U.S. properties seriously underwater in the third quarter, marking the largest year-over-year drop since the second quarter of 2015, according to Attom Data Solutions.
In the third quarter, 4.6 million properties were seriously underwater, down over 800,000 properties from the previous quarter. The 4.6 million properties by the end of the third quarter represented 8.7% of all U.S. properties with a mortgage, which is down year-over-year by 2.1 basis points from 10.8% and from 9.5% from the second quarter.
"Accelerating home price appreciation this year is increasing the velocity at which seriously underwater homeowners are recovering home equity lost during the Great Recession," said Daren Blomquist, senior vice president at Attom Data Solutions, in a press release.
"Median home prices nationwide are up 9.4% so far in 2017, the fastest pace of appreciation through the first three quarters of a year since 2013. Continued home price appreciation is also helping to grow the number of equity rich homeowners across the country compared to a year ago," he continued.
There were over 14 million properties nationwide equity rich in the third quarter, up by 905,000 properties from the same period last year, but down slightly from the previous quarter.
The 14 million properties that were equity rich represented 26.4% of all U.S. properties with a mortgage, up year-over-year from 23.4% and quarter-over-quarter from 24.6%.
The states with the highest share of equity-rich properties were Hawaii and California, and those with the highest share of underwater borrowers were Louisiana and Iowa.