The continuing recovery in the housing market has been relieving increasing numbers of homeowners from owing more on their mortgage than their home is worth.
Yet the persistent remainder has left a mark by keeping potential buyers out of the market and choking supply of homes, said Daren Blomquist, senior vice president with ATTOM Data Solutions.
One of the telling signs is that homeowners are staying in their homes longer. The Irvine, Calif., company report, released Thursday, shows that owners stayed in their homes an average of 4.26 years from 2000 to 2008. But since the Great Recession, home tenures have steadily risen, reaching 7.88 years among home owners who sold in 2016.
“It really stood out that the tenure has been steadily rising. It’s twice what it was before the recession,” Blomquist said.
The change has disrupted the traditional pattern of upward mobility: Young couples buy an older home as their first purchase, move up to a larger home, and then perhaps buy a new home. Now, more households have been unable or unwilling to move, some because they still owe more on their mortgage than they can recoup in a sale.
“That move up has been missing in this housing recovery,” Blomquist said.
Still, prices are rising. “Slowly, but surely that will encourage more homeowners to sell.”
Attom Data Solutions tracks the number of homes that are “seriously underwater” — those with mortgages that are at least 25% greater than their home’s estimated market value.
In 2014’s fourth quarter 30 of the 88 metro areas had at least 20% of homeowners seriously underwater. By fourth quarter 2016, there were only four: Las Vegas-Henderson-Paradise (22.7%); Akron, Ohio (20.1%); Cleveland-Elyria, Ohio (21.5%) and Dayton, Ohio (20%).
Since 2013, it has also tracked homeowners who are “equity rich” — having loans that are 50% or less of market value. In 2016’s fourth quarter there were 13.9 million U.S. properties that were equity rich, nearly 1.3 million more than a year ago.
The five most equity-rich metro areas in the fourth quarter of 2016 were: San Jose-Sunnyvale-Santa Clara, CA (51.6%); San Francisco-Oakland-Hayward, Calif. (47.7%); Honolulu, Hawaii (39.8%); Los Angeles-Long Beach-Anaheim, Calif. (39.2%) and Pittsburgh, Pa. (35.8%).
