The proportion of U.S. mortgages that were underwater dropped from the second quarter to the third quarter, according to RealtyTrac.
Seriously underwater homes represented 12.7% of all properties with a mortgage, as of Sept. 30, according to RealtyTrac’s U.S. Home Equity & Underwater Report. That was down from 13.3% at the end of the second quarter.
“Home sales volume and average sales prices picked up dramatically again in the second and third quarters of this year, resulting in a substantial drop in seriously underwater homeowners,” Daren Blomquist, vice president at RealtyTrac, said in a news release.
The number of seriously underwater homes peaked in the second quarter of 2012, at 28.6% of all homes.
Additionally, the number of seriously underwater homes that were in a state of foreclosure declined, dropping to 33.4% of all homes, as of the end of the third quarter, from 34.4%, at the end of the second quarter.
RealtyTrac defines seriously underwater as a home where the combined loan amount secured by the property is at least 25% higher than the property’s estimated market value.