Fewer Long Islanders are drowning in mortgage debt as the housing market continues its slow recovery, a new report shows.
In Nassau and Suffolk counties, the number of homeowners who were “underwater” — owing more on their mortgages than their homes were worth — fell 0.8 percentage points from a year earlier, according to a second-quarter report released Thursday by California-based data company CoreLogic.
Of all households with mortgages on the Island, 5.5 percent — slightly more than 31,000 homes — were underwater in the second quarter, CoreLogic reported.
The percentage of Long Islanders underwater has now been 5.5 percent or less in each of the past four quarters, the first time the rate has been below 6 percent since the third quarter of 2009, when CoreLogic began analyzing the data. The rate in the second quarter was slightly higher than the 5 percent rate in the first quarter.
The rate of homeowners underwater on their mortgages has fallen sharply since the first three months of 2013, when one in 10 had so-called negative equity — the largest share recorded on Long Island by CoreLogic.
What is lifting Long Island homeowners out of negative equity is the gradual rise in home prices in recent years, said Steven Weizel, sales manager with the Farmingdale office of Century 21 American Homes.
The falling number of underwater homeowners “creates a much more stable marketplace,” Weizel said. It also should permit more people to list their homes for sale, since home sellers “can have some money coming to them at the closing,” he said.
Homes on Long Island sold for a median price of $404,000 in the April-through-June period, a 5.6 percent annual gain, according to the most recent quarterly report by the appraisal company Miller Samuel and the brokerage Douglas Elliman. The figures exclude East End sales.
The median home price on Long Island, excluding the East End, spiked to $442,380 in the third quarter of 2007, and fell to a low of $339,000 by the last quarter of 2011.
Nationwide, homeowners also enjoyed an increase in home equity in the second quarter, when 5.4 percent owed more than their homes were worth. That level was down from 7.1 percent a year earlier. The U.S. peak was in the last quarter of 2009, when more than one in four homeowners were underwater on their mortgages, CoreLogic reported.
Homeowners’ rising home equity “not only reduces mortgage risk, but also supports consumer spending and economic growth,” CoreLogic chief executive Frank Martell said in a statement.
CORRECTION: The percentage of Long Islanders “underwater” on their mortgages was slightly higher in the second quarter than in the prior three quarters, according to data from CoreLogic. A prior version of this story online misstated the level of underwater mortgages relative to prior quarters.