Number of ‘seriously underwater’ mortgages in Phoenix area shrinking
Aug 9, 2018, 12:58 PM
(AP Photo/John Bazemore)
(AP Photo/John Bazemore)
PHOENIX — The Phoenix area has a lower rate of mortgages considered “seriously underwater” than the rest of the nation, according to a new report.
In another positive sign for local homeowners, the study released Thursday by ATTOM Data Solutions showed that nearly a quarter of Valley homes were considered “equity rich.”
The report defined “seriously underwater” as owing 25 percent more on a mortgage than the property’s market value. “Equity rich” is when the property is worth at least double what is owed.
In the Phoenix area, 6.8 percent of properties with a mortgage were seriously underwater during the second quarter of 2018, down from almost 10 percent a year ago, according to Daren Blomquist, senior vice president for the real estate research firm that did the study.
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“Going back to when we first started talking about this in 2013, one in every three homes in the Phoenix area was seriously underwater — 33 percent,” Blomquist told KTAR News 92.3 FM. “A year ago it was one in every 10. … We’re making progress as home prices rise.”
The national average was 10.1 percent. The Phoenix metro area ranked 69th out 97 markets analyzed for seriously underwater mortgages, Blomquist said.
Baton Rouge, Louisiana, topped the list at 21 percent.
The study said 24 percent of Valley homeowners had equity-rich mortgages, up from 23 percent a year ago.
“It’s not rising as fast as it was as home price appreciation does start to moderate a bit and we also are seeing evidence that homeowners are leveraging equity a little bit more, so those equity-rich homeowners are actually taking some of that equity out,” Blomquist said.
As interest rates rise, Blomquist said “some signs of weakness” are appearing in the national market, but not locally.
“In some areas — not Phoenix yet — we’re starting to see an uptick in foreclosure activity and a slowdown in home price appreciation,” he said. “That certainly could effect these underwater numbers, as well.”
KTAR News 92.3 FM’s Jeremy Foster contributed to this report.
