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‘Seriously Underwater’ Home Mortgages Tick Up Across the US
Posted on 5/9/24 at 9:45 am
Posted on 5/9/24 at 9:45 am
archive today
Roughly one in 37 homes are now considered seriously underwater in the US and that share is much higher across a swath of southern states, according to data out Thursday.
Nationally, 2.7% of homes carried loan balances at least 25% more than their market value in the first few months of the year. That’s up from 2.6% in the previous quarter, according to the first-quarter 2024 US Home Equity & Underwater Report from ATTOM, a real estate data firm.
While the share of these homes is ticking up, it remains much lower than before the pandemic, when the rate was more than twice as high.
Mortgages can generally become seriously underwater when someone overpays for a home, or when it is purchased with a small downpayment that doesn’t provide a sufficient buffer if the property falls in value.
During the pandemic, government stimulus and rising property prices were a huge boon to homeowners, but higher interest rates meant to curb inflation may be finally be helping to cool the housing market.
Several southern states saw shares of seriously underwater homes grow more than the rest of the country. Kentucky’s share jumped to 8.3% in the first few months of the year from 6.3% in the previous quarter. West Virginia’s share rose to 5.4% from 4.4% over the same period, while Oklahoma climbed to 6.1% from 5.5%, and Arkansas went up to 5.7% from 5.2%.
The states with the biggest increase in number of seriously underwater homes are also in the south. Kentucky is in first place with a year-over-year jump of more than 20,500 homes - nearly twice as many as second-place Mississippi and Oklahoma, coming in third.
Among metro areas with a population of at least 500,000, Baton Rouge, La. had the largest share of seriously underwater mortgages in the first quarter, with 13.4%. Neighboring New Orleans came in second with 7.3%, followed by Jackson, Miss., and Little Rock, Ark., with 6.5% and 6%, respectively. Syracuse, NY came in fifth, with 5.6% of homes seriously underwater.
Roughly one in 37 homes are now considered seriously underwater in the US and that share is much higher across a swath of southern states, according to data out Thursday.
Nationally, 2.7% of homes carried loan balances at least 25% more than their market value in the first few months of the year. That’s up from 2.6% in the previous quarter, according to the first-quarter 2024 US Home Equity & Underwater Report from ATTOM, a real estate data firm.
While the share of these homes is ticking up, it remains much lower than before the pandemic, when the rate was more than twice as high.
Mortgages can generally become seriously underwater when someone overpays for a home, or when it is purchased with a small downpayment that doesn’t provide a sufficient buffer if the property falls in value.
During the pandemic, government stimulus and rising property prices were a huge boon to homeowners, but higher interest rates meant to curb inflation may be finally be helping to cool the housing market.
Several southern states saw shares of seriously underwater homes grow more than the rest of the country. Kentucky’s share jumped to 8.3% in the first few months of the year from 6.3% in the previous quarter. West Virginia’s share rose to 5.4% from 4.4% over the same period, while Oklahoma climbed to 6.1% from 5.5%, and Arkansas went up to 5.7% from 5.2%.
The states with the biggest increase in number of seriously underwater homes are also in the south. Kentucky is in first place with a year-over-year jump of more than 20,500 homes - nearly twice as many as second-place Mississippi and Oklahoma, coming in third.
Among metro areas with a population of at least 500,000, Baton Rouge, La. had the largest share of seriously underwater mortgages in the first quarter, with 13.4%. Neighboring New Orleans came in second with 7.3%, followed by Jackson, Miss., and Little Rock, Ark., with 6.5% and 6%, respectively. Syracuse, NY came in fifth, with 5.6% of homes seriously underwater.
24
Posted on 5/9/24 at 9:46 am to Areddishfish
Good luck selling those houses at all time high prices!!
Posted on 5/9/24 at 9:47 am to Areddishfish
Who gets the first bailout?
Posted on 5/9/24 at 9:47 am to Areddishfish
I thought this was a Stout thread
Posted on 5/9/24 at 9:55 am to Areddishfish
quote:
While the share of these homes is ticking up, it remains much lower than before the pandemic, when the rate was more than twice as high.
Woah
Posted on 5/9/24 at 9:57 am to Areddishfish
2008 all over again.
Posted on 5/9/24 at 10:06 am to Areddishfish
Time for those cash flush west Texas boys to swoop in and save the day.
Posted on 5/9/24 at 10:07 am to Areddishfish
wait until they remove St George
Posted on 5/9/24 at 10:14 am to Areddishfish
Used golf carts about to be cheap.
Posted on 5/9/24 at 10:15 am to Areddishfish
quote:
While the share of these homes is ticking up, it remains much lower than before the pandemic, when the rate was more than twice as high.
The OT baws read the headline but forget to read the article.
Posted on 5/9/24 at 10:17 am to Areddishfish
quote:
homes carried loan balances at least 25% more than their market value
I wouldn't be able to sleep at night
Posted on 5/9/24 at 10:19 am to Areddishfish
The waters are rising
The dams gonna break soon
Half of americans live check to check and another half can’t afford a $1,000 emergency
Can’t sell their underwater home. Can’t make car payments or rent or buy groceries .
The dams gonna break soon
Half of americans live check to check and another half can’t afford a $1,000 emergency
Can’t sell their underwater home. Can’t make car payments or rent or buy groceries .
Posted on 5/9/24 at 10:21 am to Areddishfish
Of course they are..
Overpriced homes coupled with 7+% interest rates.
Overpriced homes coupled with 7+% interest rates.
Posted on 5/9/24 at 10:25 am to Areddishfish
If youre in the house you plan on living in forever, does it matter much if you overpaid for it?
We(as in people) overpay for stuff all the time
We(as in people) overpay for stuff all the time
This post was edited on 5/9/24 at 10:26 am
Posted on 5/9/24 at 10:25 am to Areddishfish
quote:
homes carried loan balances at least 25% more than their market value
That must include HELCs (approved with some squirrely appraisals). Prices have not dropped enough for 1st mortgages to be at 125% LTV.
Posted on 5/9/24 at 10:41 am to Areddishfish
So people ran out to buy homes at massively inflated prices and are now upside down in them?
I’m SHOCKED at these revelations!
I’m SHOCKED at these revelations!
Posted on 5/9/24 at 10:48 am to Areddishfish
frick that shite, I owe 7.5K on mine
Posted on 5/9/24 at 11:04 am to Areddishfish
quote:
Nationally, 2.7% of homes carried loan balances at least 25% more than their market value in the first few months of the year.
We are getting close to 2007 numbers. 2008 is when the bottom started to fall out. If Michael Burry starts shorting REI again hold onto your arse.
Big issue with negative equity loans are usually subprime short term with balloon payment. People want to refinance hoping the negative equity turns positive which it won’t in this market. People that financed at 4/5% 3 years ago are going to have to refi at 8/9% today. Note goes up 75% and they default. Same shite that happened in 2008. Banks never stopped MBS or CDO’s. We are headed there again I’m afraid.
I know someone in this situation and they won’t be able to afford refi.
This post was edited on 5/9/24 at 11:11 am
Posted on 5/9/24 at 11:04 am to Areddishfish
quote:
During the pandemic, government stimulus and rising property prices were a huge boon to homeowners, but higher interest rates meant to curb inflation may be finally be helping to cool the housing market.
Yeah, people went mental during the pandemic. People who didn't need to buy a new home suddenly decided they absolutely needed to buy a new home no matter the cost. There are tons of old threads on here with that exact situation.
This post was edited on 5/9/24 at 11:05 am
Posted on 5/9/24 at 11:05 am to Areddishfish
quote:
13.4%
This is insanely high.
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