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February 1, 2024

Underwater mortgages just rose across the U.S., but Maine homes are staying dry

More mortgaged homes sank "seriously underwater" across the country during the fourth quarter of 2023, a report released Thursday morning said. But in Maine, more home loans are backed by substantial equity than almost anywhere else.

The portion of soaking wet homes — those with loans exceeding the property market value by at least 25% — rose from 2.5% to 2.6% of all U.S. residential mortgages, according to data from ATTOM, a California-based company that tracks real estate data.

Meanwhile, the portion of mortgaged homes that were "equity-rich" in the fourth quarter — meaning their loan balances were no more than half the property value — fell from 47.4% of all mortgages to 46.1%. The latest figure was also down from 48% in the fourth quarter of 2022.

The percentage fluctuations may seem slight, but represent potentially serious risks for hundreds of thousands of U.S. home owners. ATTOM did not release the actual numbers of mortgages analyzed in its findings.

The company noted that in Maine, 60% of home mortgages are equity-rich, the second-highest percentage for any state. In Vermont, the ratio was 82.8%.

Nine of the 10 states with the lowest percentages of equity-rich properties during the fourth quarter were in the Midwest or the South. The smallest portion, 19.7%, was in Louisiana.

In Greater Portland, 63.6% of mortgaged homes were equity-rich, ranking No. 3 among the highest levels in 107 metropolitan areas nationwide with a population of at least 500,000. Only two California cities ranked higher: San Jose, 69.1%, and San Diego, 63.7%.

The 15 metro areas with the lowest percentages of equity-rich properties were all in the Midwest and the South. The smallest portion was 13.8% in Baton Rouge, La.

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