Under water properties dropped to just 8.8% (approximately 5M) of all properties with a mortgage, according to ATTOM Data Solutions’ Q4 2018 US Home Equity and Underwater Report. Though unchanged from Q3 2018, this 8.8% of underwater properties is down from 9.3% in Q4 2017.

Seriously underwater properties have combined estimated balances of loans secured by the properties of at least 25% higher than the properties’ estimated market values.

According to Todd Teta, ATTOM’s chief product analyst, time is on the side of both seriously underwater and equity rich homeowners. “…Homeowners (who are staying in their homes longer) that are seriously underwater may find themselves coming up for air as they continue to pay off excessive legacy mortgages or sell.”

This report showcases the huge disparity between West Coast markets and its highest share of equity rich homeowners vs. the South and Midwest markets that have “…stubbornly high rates of seriously underwater homeowners.”

Though Q2 2012 had the highest rate of seriously underwater properties, a huge 28.6% nationwide, Louisiana (20.8%), Mississippi (16.9%), Arkansas (15.9%), Illinois (15.6%) and Iowa (15.2%) all have disturbingly high rates of underwater properties today.

Metro areas with the highest rates of seriously underwater properties include…

  • Baton Rouge – 20.7%
  • Youngstown – 19.0%
  • New Orleans – 19.0%
  • Toledo – 18.0%
  • Scranton – 17.7%
  • Cleveland – 16.5%
  • Dayton – 15.9%
  • Memphis – 15.9%
  • Akron – 15.7%
  • Harrisburg – 15.4%

There are 272 zip codes where more that 50% of all properties with mortgages are seriously underwater. Chicago, Cleveland, St. Louis, Atlantic City, Detroit and Virginia Beach are the hardest hit areas. The hardest hit zip codes are:

  • 08611 – Trenton – 70.3%
  • 63137 – St. Louis – 64.8%
  • 60426 – Harvey IL – 62.3%
  • 38106 – Memphis – 60.5%
  • 61104 – Rockford IL – 59.6%