Report Examines Seriously Underwater Rate by Loan Vintage

The highest percentage of residential mortgage loans that were seriously underwater in this year's third quarter were originated during the housing bubble between 2004 and 2008, according to RealtyTrac's U.S. Home Equity & Underwater Report for Q3 2014.

RealtyTrac reported that about 15 percent of all residential properties with a mortgage in the U.S. were seriously underwater in Q3, meaning the combined loan amount secured by the property is at least 25 percent higher than the property's estimated market value. About 40 percent of the mortgage loans originated in 2006 were seriously underwater in Q3 2014, the highest percentage for any year after 2004, according to RealtyTrac.

The number of Q3's seriously underwater mortgages that were originated in the years following 2006 has declined steadily with each year before inching back up in the last two years. The percentage of seriously underwater mortgages in Q3 originated in 2007 was 35 percent; in 2008, it was 25 percent; and for every year, it declined until hitting a low of 7 percent in 2012. The percentage of mortgage loans originated in 2014 that were seriously underwater in Q3 was 10 percent.

Meanwhile, the highest percentage of equity-rich homeowners, which are those with at least 50 percent equity in their properties, were those who bought or refinanced their homes between 1994 and 1998, according to RealtyTrac.

The highest percentage of seriously underwater homeowners in Q3, according to RealtyTrac, were those that owned homes that were worth less than $200,000. About 55 percent of homes worth less than $50,000 were seriously underwater in Q3, while only 10 percent of homes in that price range were equity rich. About 34 percent of homes in the price range of $50,000 to $100,000 were seriously underwater, while 13 percent were equity rich.

Homes worth more than $200,000 had lower percentages of seriously underwater homeowners and higher percentages of equity rich homeowners in Q3, according to RealtyTrac. For example, about 6 percent of homeowners with homes worth between $500,000 and $750,000 were seriously underwater, while 31 percent of homeowners with homes in that price range were equity rich.