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A new report from CoreLogic finds that only 2.9 percent of mortgaged Massachusetts residential properties were underwater on their loans in the second quarter of this year.
Driven by rising home values, the news comes as Massachusetts’ unemployment rate has begun to fall from a highest-in-the-nation 17 percent. The year-to-date median Massachusetts single-family sale price rose 6.3 percent year-over-year through July 31, according to The Warren Group, publisher of Banker & Tradesman.
The average Massachusetts homeowner had gained $14,000 in equity in the second quarter, CoreLogic reported.
CoreLogic put Massachusetts in the “moderate category” – a share of mortgages underwater not as low as states like California or Texas (1.7 percent), but lower than New York State (4.5 percent) and Florida (4.3 percent). Louisiana, Illinois and Connecticut have the highest shares of underwater mortgages, at 9.3 percent, 6.5 percent and 6.4 percent, respectively. The report did not include data for Maine, Vermont, West Virginia, Mississippi or South Dakota.
Nationally, only 3.2 percent of mortgaged residential properties were upside-down on their mortgages. This represents a 5.4 percent drop from the first quarter of this year. Homeowner equity has risen 6.6 percent overall between the second quarter of 2019 and the second quarter of 2020, and the number of homes with negative equity fell by 15 percent over the same time frame. The national aggregate value of negative equity in mortgaged residential homes dropped $700 million quarter-over-quarter and $20 billion year-over-year, to $284 billion.
“Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures,” CoreLogic President and CEO Frank Martell said in a statement. “Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term.”
