Pierce County homeowners haven’t recovered as much equity in their home mortgages as the national average, new data show, while Thurston County homeowners surpassed that average.
There’s hope for Pierce County, though, in the numbers provided Thursday by real estate data tracking firm RealtyTrac. Nationally, some 16 percent of mortgage holders were getting closer to either owing exactly what their house is worth, or just a bit more, by the end of last year. But in Pierce County, 21 percent of mortgage holders fell into that category.
Otherwise Pierce lagged the nation in the fourth quarter of 2014. Some 13 percent of national mortgage holders were “seriously underwater,” meaning they owe at least 25 percent more than what the property is worth. That figure was 15 percent in Pierce County. And nationally, 20 percent of homeowners were “equity rich,” meaning they have at least 50 percent equity, while just 15 percent in Pierce County did.
In Thurston County, just 10 percent of mortgage holders were seriously underwater. Some 16 percent of them were equity rich.
King County’s picture was, as usual, far better than the rest of Western Washington. Just 7 percent of its mortgage holders were seriously underwater, and 27 percent were equity rich.
Home sale prices have been steadily increasing, though they haven’t reached pre-recession highs. Perhaps not surprisingly, RealtyTrac found that the year a mortgage originated is a good predictor for what percentage of loans from that year are still underwater.
Some 36 percent of all U.S. mortgages taken out in 2006 are still seriously underwater. The next worse year is 2007, at 32 percent; followed by 2005, at 28 percent.
Another interesting tidbit from Thursday’s data release: More homes in foreclosure at the end of 2014 have equity than were underwater. Nationally, 42 percent of homes in some stage of foreclosure actually had some equity, and 35 percent were seriously underwater. In Washington, the spread is wider. Almost half, or 45 percent, of homes in some stage of foreclosure had equity. Just 24 percent of foreclosed homes were underwater.
That reflects distress in the broader economic market rather than just the bursting of a real estate bubble, said RealtyTrac vice president Daren Blomquist.
“The majority of distressed homeowners are (starting to face) foreclosure as result of job loss or some other tough life circumstance that makes it difficult for them to make house payments — rather than as a result of risky, intrinsically unaffordable mortgage products,” he said.
It’s also possible that some of the foreclosed homes gained equity during the extended amount of time the foreclosure might have taken.
“There are still homeowners with the bad loans in foreclosure who have been lingering in foreclosure so long,” he said, and “they may have regained equity in their home and not even realize it.”