The Chicago figure is the highest among the 20 largest metro areas in Attom’s study. In 15 of the 20, the figure is below four percent.
That is not to say the fast-paced housing market hasn’t helped. A year earlier, more than 10 percent of Chicago-area mortgages were seriously underwater. The difference in a year—about two percentage points—means that nearly 30,000 Chicago households rose out of seriously underwater status between the first quarter of 2020 and the first quarter of 2021.
On the other end of the spectrum are people who are equity rich, meaning their equity stake in the home is at least half its current market value. In the Chicago area, 18.4 percent of homeowners with a mortgage were equity rich at the end of the first quarter, according to Attom. In 15 of the 20 largest metro areas, at least 25 percent of homeowners were equity rich.
Chicago therefore has the smallest share of homeowners who can easily afford to sell and the largest share of people who can’t afford it.
This goes a long way toward explaining the super-low inventory of homes on the market: A lot of people just can’t afford to put their home on the market.
The data continues the pattern that Crain’s reported using Attom’s data from the end of the previous quarter. In the intervening months, prices have continued to jump, but not enough to heal homeowners’ equity stake that grew excruciatingly slowly for several years before the pandemic.
It wasn’t until the end of 2020 that home values here recovered to where they’d been at the height of the last boom, while all other major cities had already crossed that threshold.
In raw numbers, Chicago about 159,400 households seriously underwater, more than New York, Los Angeles and Dallas combined.