Approximately 5.41 million homes in the United States were still considered seriously underwater at the end of 2016, according to the property database RealtyTrac. However, this total still marked a decrease of about 1.03 million properties from the previous year.

In its Year-End 2016 U.S. Home Equity & Underwater Report, RealtyTrac said seriously underwater homes—defined as having a combined loan amount at least 25 percent greater than the property's estimated market value—made up 9.6 percent of all mortgaged U.S. homes. This share was down from 10.8 percent in the third quarter of 2016 and 11.5 percent at the end of 2015.

This share was its lowest point since RealtyTrac began tracking the data in the first quarter of 2012. At that point, the company determined that more than one in four mortgaged residences—12.53 million—were seriously underwater.

"Since home prices bottomed out nationwide in the first quarter of 2012, the number of seriously underwater U.S. homeowners has decreased by about 7.1 million, an average of about 1.4 million each year," said Daren Blomquist, senior vice president of RealtyTrac parent company ATTOM Data Solutions. "Meanwhile, the number of equity rich homeowners has increased by nearly 4.8 million over the past three years, a rate of about 1.6 million each year."

According to RealtyTrac, the share of seriously underwater homes in Connecticut ranged from 7.3 percent in Tolland County to 13.8 percent in New London County. The report estimates that 99,691 mortgaged properties in the state were seriously underwater at the end of 2016.

A total of 13.88 million homes in the U.S. were considered equity rich, meaning the combined loan amount on the property was 50 percent or less of the estimated market value. The number of equity rich homes was up by 1.26 million from the previous year and represented 24.6 percent of all mortgaged U.S. properties. This was up from 23.4 percent in the third quarter of 2016 and 22.5 percent at the end of 2015.

Despite the more positive trends, Blomquist said the severe loss of equity during the housing crisis caused many homeowners to stay in their property longer before selling. This disrupted the usual pattern of move-up buyers, which creates more demand for newer and pricier homes while opening up more affordable inventory for first-time buyers. In 83 percent of the 316 of the metropolitan statistical areas included in the report, the average homeownership tenure increased from the previous year.

"Between 2000 and 2008, our data shows the average homeownership tenure nationwide was 4.26 years, but that average tenure has been trending steadily higher since 2009, reaching a record high of 7.88 years for homeowners who sold in 2016," said Blomquist.

New England and California markets had the longest average homeownership tenure. Among the 52 metro areas in the report with a population of at least 1 million, sellers in Hartford spent the longest time in their homes at 11.57 years. This was followed by Providence (10.36 years), Boston (10.04 years), San Francisco (9.92 years), and San Jose (9.79 years).

In these same 52 metro areas, the shortest average homeownership tenures occurred in Rochester, New York (4.67 years), New Orleans (4.85 years), Louisville (4.93 years), Virginia Beach (5.37 years), and Atlanta (5.66 years).

Nevada had the highest share of seriously underwater homes at 19.5 percent. Among the 88 metro areas with a population of at least 500,000 and sufficient data, Las Vegas had the highest share of seriously underwater homes at 22.7 percent.

Seriously underwater properties were also common in Ohio, where they made up 16.3 percent of all mortgaged properties. The seriously underwater share stood at 21.5 percent in Cleveland, 20.1 percent in Akron, 20 percent in Dayton, and 19.9 percent in Toledo.

Other states with a high share of seriously underwater properties included Missouri at 14.6 percent and Louisiana at 14.5 percent. Other cities with a high share of seriously underwater properties included Detroit (17.5 percent), Chicago (16.9 percent), and Orlando (15.7 percent).

Hawaii had the highest share of equity rich properties, with 37.8 percent of the state's mortgaged properties falling into this category. This was followed by Vermont (36.9 percent), California (36 percent), New York (34.9 percent), and Oregon (32 percent).

The larger cities with the highest equity shares at the end of 2016 were San Jose (51.6 percent), San Francisco (47.7 percent), Honolulu (39.8 percent), Los Angeles (39.2 percent), and Pittsburgh (35.8 percent).

RealtyTrac found that homes were most likely to be seriously underwater if they were purchased between 2005 and 2007, shortly before the downturn in the nation's housing market and economy. Properties owned for more than 20 years were most likely to be equity rich, with 45.4 percent falling into this category.

The company's reports on home equity and seriously underwater properties are based on open loan data and estimated property values. RealtyTrac considers equity at the state, metro, county, and ZIP code level.

RealtyTrac has differed from property information company CoreLogic in its estimates. In its last report, for the third quarter of 2016, CoreLogic estimated that 93.7 percent of mortgaged homes in the U.S. had positive equity. That report considered only 2.4 percent of homes to be seriously underwater.