PROVIDENCE – Rhode Islanders had 22,760 “underwater” mortgages in the first quarter of 2017 according to CoreLogic. In a Thursday report, the real estate information and analytics company said 9.4 percent of all mortgages in the Ocean State were underwater, 3.3 percentage points higher than the national average.
An underwater mortgage is a mortgage in negative equity – when the value of a mortgage exceeds the value of a home. Only 15 states reported higher negative equity share than the national average.
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The national average negative equity rate declined 1.9 percentage points year over year to 6.1 percent.
While Rhode Island remained above the national average, the state is improving with the rest of the country. CoreLogic reports that Rhode Island home equity in the first quarter of 2017 increased $19,000 on average year over year per borrower and that the share of homes with negative equity decreased 3.9 percentage points year over year, a reduction of approximately 9,000 mortgages that were underwater in the first quarter of 2016.
Whereas Rhode Island ranked No. 4 for highest percentage of negative equity in the nation in the first quarter of 2016, the Ocean State now ranks No. 8.
“Homeowner equity increased by over $750 billion during the last year, the largest increase since mid-2014,” said Frank Martell, president and CEO of CoreLogic. “The rising cushion of home equity is one of the main drivers of improved mortgage performance. It also supports consumer balance sheets, spending and the broader economy.”
The Ocean State also has 4,880 near-equity-negative mortgages, homes with less than 5 percent equity, about 2.0 percent of all mortgages, 0.4 percentage points higher than the national average.
The Providence-Warwick metropolitan area had 8.4 percent of all mortgages classified as underwater, a reported 30,809 mortgages, which represented a 3.3 percentage point decline year over year. The region also reported a 1.9 percent near-equity-negative rate, a 0.6 percentage point reduction year over year.
Massachusetts reported a negative equity mortgage rate of 5.5 percent, a 2.1 percentage point reduction year over year.
Rhode Island Housing recently launched a program to assist homeowners in the state with underwater mortgages.
Chris Bergenheim is the PBN web editor.
