The gap between equity rich homeowners and mortgage borrowers who are seriously underwater narrowed in the second quarter, highlighting the uneven nature of the housing market's recovery since the Great Recession, according to Attom Data Solutions.
While house values in some regions are putting healthy amounts of equity in homeowner pockets, areas slower to return to prerecession norms have borrowers owing at least 25% more than their property's estimated worth.
"The share of seriously underwater properties has dropped well below 10% in bellwether housing markets such as California, Washington, Texas, Colorado and New York, but the underwater rate remains stubbornly high in markets where price appreciation has not been as strong during the housing recovery of the last six years," Daren Blomquist, senior vice president at Attom, said in a press release.
"Nationwide the number of equity-rich homeowners is more than twice the number of seriously underwater homeowners, but the gap between home equity haves and have-nots persists because home price appreciation is certainly not uniform across local markets or even within local markets," he added.
Over 13.6 million properties were equity rich in the second quarter, marking a decline of 428,896 households from a year ago. Comparatively, 5.5 million properties were seriously underwater in the second quarter, which is up by 163,084 from 2Q17.
Louisiana and Illinois had the highest shares of seriously underwater properties, with 21.7% and 18.5%, respectively. Missouri, Mississippi and Ohio also had higher shares of underwater properties compared to other states.
Last quarter marked the smallest annual decline in seriously underwater properties since Attom began tracking this data.