(Globe wire services) — Cities are alive and well for home buyers.
US housing prices rose at essentially the same rate in urban and suburban areas last year, jumping 8.8 percent and 8.7 percent respectively, according to an analysis Zillow released Thursday.
The data complicate the narrative that workers are fleeing urban areas for the suburbs or even “Zoom towns” out West near ski resorts and national parks, Bloomberg reported.
While prices in the suburban parts of expensive metro areas — including New York, Seattle, Boston, and San Francisco metro — saw bigger gains, home values are soaring broadly across the United States as people rush to take advantage of historically low mortgage rates to get extra space after months of social distancing. Home values grew 7.5 percent in Greater Boston’s urban areas in 2020 and 9.9 percent in the suburbs. The typical urban home here is worth $659,105, and the typical home in the suburbs is worth $513,814, according to the report.
“The for-sale housing market is experiencing a pandemic-fueled surge in both urban and suburban areas,” Alexandra Lee, Zillow economist, said in a statement. “Homes have become more important than ever, and buyers are eager to hit the market to find their next place to live.”
In some more affordable metro areas — including Kansas City, Cleveland, and Cincinnati — urban home values accelerated faster than suburban ones, according to Zillow.
Meanwhile, ATTOM Data Solutions released its “US Home Equity & Underwater Report” on Thursday, noting that 17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.
The property database found that the count of equity-rich properties in the fourth quarter of 2020 represented 30.2 percent, or about 1 in 3, of the 59 million mortgaged homes in the United States. That was up from 28.3 percent in the third quarter of 2020, 27.5 percent in the second quarter, and 26.7 percent in the fourth quarter of 2019, despite the ongoing economic damage caused by the worldwide coronavirus pandemic, PRNewswire reported.
The report also shows that 3.2 million, or 1 in 18, mortgaged homes in the fourth quarter of 2020 were considered seriously underwater, with a combined estimated balance of loans secured by the property at least 25 percent more than the property’s estimated market value. That figure represented 5.4 percent of all US properties with a mortgage, down from 6 percent in the prior quarter, 6.2 percent in the second quarter of 2020, and 6.4 percent a year ago.
The continued home-equity improvement during the fourth quarter occurred as the US housing market closed out one of its best years in the past decade, with the national median home price soaring 13 percent. Values spiked and the nation’s nine-year housing market boom surged ahead even as the pandemic idled or slowed major sectors of the American economy, throwing millions of people out of work. Market gains resulted from a bubble of buyers who largely escaped the pandemic’s financial damage looking to take advantage of super-low interest rates.
Six of the 10 states with the biggest gains in the share of equity-rich homes from the third quarter to the fourth quarter of 2020 were in the West. The top five were California, where the portion of mortgaged homes considered equity-rich rose from 39.7 percent in the third quarter of 2020 to 46.1 percent in the fourth quarter, Idaho (up from 39.5 percent to 42.7 percent), Montana (up from 31.9 percent to 34.8 percent), Arizona (up from 29.4 percent to 32.3 percent), and Vermont (up from 45.1 percent to 47.8 percent).
The states where the share of equity-rich homes decreased or went up by the smallest amounts were Nebraska (down from 23 percent to 22.4 percent), South Dakota (up from 30.3 percent to 30.4 percent), North Dakota (up from 24.7 percent to 24.8 percent), Massachusetts (up from 35.7 percent to 35.9 percent), and Iowa (up from 21.8 percent to 22.1 percent).
‘‘The good news is that fewer and fewer homeowners across the country are underwater on their loans,’’ said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company. ‘‘But for those homeowners who are, the uncertainty of the economy during the pandemic looms large. The dual-trigger effect of losing a job and being underwater on a mortgage often, unfortunately, leads to a foreclosure.’’
The four states where the percentage of seriously underwater homes rose from the third quarter to the fourth quarter of 2020 were Connecticut (up from 7.7 percent to 8.2 percent), Nebraska (up from 6.9 percent to 7.3 percent), North Dakota (up from 8 percent to 8.1 percent), and Massachusetts (up from 3.8 percent to 3.9 percent).
The counties with the highest share of equity-rich properties were San Mateo County in California, outside San Francisco (71.2 percent equity-rich); Washington County in Wisconsin, outside Milwaukee (69.9 percent); Santa Clara County in California (66.7 percent); San Francisco County in California (63.1 percent), and Dukes County (Martha’s Vineyard) in Massachusetts (60.7 percent).
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