NWA "seriously underwater" mortgage rate is half state average
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Arkansas had the sixth-highest rate of mortgaged homes considered seriously underwater at 5.7% in the first quarter of this year, a report by Attom states.
Why it matters: That means these folks owe more in mortgages than their home is worth — a horrendous financial situation if they need to sell their house.
State of play: Many U.S. homeowners are sitting on a mountain of equity after years of rising house prices; however, a disproportionate share of mortgage holders in the South and Midwest are underwater on their loans.
Zoom in: The rate was 2.3% in Benton County and 2.5% in Washington County, while the national average was 2.7%.
- To compare with other population centers in the state, the rates were 6.8% in Pulaski County, 6.6% in Craighead County and 5% in Sebastian County.
The big picture: The South and Midwest have the highest share of underwater mortgages because home values there have fallen from their peak during the pandemic housing boom, per Attom.
- And people who bought at the top are seeing their home values dip below what they paid (or borrowed) for the house.
Reality check: These shares are still relatively small. After the housing crisis of 2008, one in four homes with mortgages were underwater.
- Unemployment was high in that recession, and many people who couldn't repay their loans by selling their house were forced into foreclosure or short sales.
- Right now, unemployment in the U.S. is low — and the economy is strong.
Bonus: Our "equity-rich" homes"
More than one-third of Arkansas homes were considered "equity-rich" in the first quarter of this year, according to Attom, meaning the property owner held at least 50% equity.
Context: Nationally, 44% of homes were equity-rich. Arkansas, at 36.2%, ranks 38th for the highest rate of homes with at least 50% equity.
Yes, but: The case is again different for NWA, where 48% of homes in Washington County and 50.7% of homes in Benton County are considered equity-rich.
- The rates were 22.2% in Pulaski County, 26.3% in Craighead County and 36.5% in Sebastian County.