Seasonal factors contributed to an 89,000-unit increase in the number of seriously delinquent properties in the first quarter from the fourth quarter of 2016.

The quarter ended with nearly 5.5 million homes seriously underwater, compared with 5.4 million at the end of the fourth quarter and 6.7 million for the first quarter of 2016.

"There is typically a seasonal increase in the share of underwater homes in the first quarter. It's primarily a result of a corresponding seasonal uptick in the share of distressed sales in the quarter along with a general seasonal lull in home prices, creating a drag on home values.

"This year we also saw an uptick in refinancing loan originations in the fourth quarter of 2016, a sign that more homeowners are leveraging more of the equity in their home, which could also be contributing to the seasonal uptick in the share of homes underwater," said Daren Blomquist, senior vice president of Attom Data Solutions in response to a question.

There was a 267,476 increase in the number of seriously delinquent homes in the first quarter of 2016 compared to the fourth quarter of 2015.

At the end of the first quarter, approximately 9.7% of all properties with a mortgage were underwater, compared with 9.6% in the fourth quarter and 12% one year ago.

The number of homes where the borrower owes more than the property is worth "remains stubbornly high in often-overlooked pockets of the housing market. For example, we continue to see one-in-five properties seriously underwater in several Rust Belt cities along with Las Vegas and Central Florida. Additionally, close to one-third of homes valued below $100,000 are still seriously underwater," Blomquist said in a press release.

The five markets with the largest quarter-to-quarter increase in underwater properties were Baltimore, up 26,974; Philadelphia, up 8,919; McAllen, Texas, up 7,746; Cleveland, up 7,631; and St. Louis, up 6,844.

A property literally being underwater might have played a role in the increase.

"Several of the cities with the biggest quarterly increases in underwater properties saw a corresponding increase in share of distressed sales in the first quarter, creating a drag on overall home values, and in the case of Baton Rouge that increase in distressed sales may be in part attributable to the catastrophic flooding there in August 2016," Blomquist noted. "Across the country, the share of seriously underwater homes was higher in high-risk flood zones."

Meanwhile, the number of equity-rich homes with a mortgage — defined as where the loan amount is less than 50% of the property's market value — also declined from the fourth quarter, to 13.7 million from 13.9 million. In the first quarter of 2016, there were only 12.4 million equity-rich properties.

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