Increasing home prices continued to provide some relief for homeowners who were underwater on their mortgage in the second quarter of 2016. According to the latest U.S. Home Equity and Underwater report from the housing data company RealtyTrac, the share of homeowners who owed considerably more on their mortgage than their home's value continued to drop.

ATTOM Data Solutions, the new parent company of RealtyTrac, looked at mortgages and deeds of trust in more than 1,400 counties, representing 88 percent of the U.S. population, for the report. The company used automated valuation models to estimate the loan-to-value ratio for more than 56 million mortgaged homes.

The report indicates that there were about 6.67 million homes that were considered seriously underwater on their mortgage during the second quarter of the year. This number represents 11.9 percent of mortgaged U.S. properties, and the share was down from 12 percent in the first quarter of the year and 13.3 percent in the second quarter of 2015.

A seriously underwater home is defined as a property with a loan-to-value ratio of at least 125 percent. In this situation, the amount a homeowner owes on their mortgage is at least 25 percent more than the home's value.

"Rising home prices are lifting all home equity boats: bailing out seriously underwater homeowners and enriching homeowners who already have positive equity," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "Nationwide home prices reached a new all-time high in June on the heels of 52 consecutive months of annual increases. While that national trend is consistent in most markets across the country, there are still some local markets and sub-markets that have been largely left behind by the housing recovery and which still have a high percentage of underwater homeowners."

The report says 776,958 properties regained equity compared to the previous year, including 37,235 that regained equity compared to the first quarter of the year. The number of seriously underwater homes was also down by more than 6.1 million homes from the peak in the second quarter of 2012, when 12.8 million homes were seriously underwater.

Highest shares

Nevada had the highest percentage of seriously underwater homes, with 22.2 percent of homes in this state falling into this category. Las Vegas had the second highest share of seriously underwater homes—25.7 percent—among the 88 metropolitan statistical areas with a population of at least 500,000.

Many cities in Ohio also had a high share of seriously underwater homes, with 20.9 percent of homeowners in this state owing at least 25 percent more on their mortgage than the home's value. Cleveland had the highest share of seriously underwater homes among smaller cities at 27.5 percent. Other metropolitan statistical areas in Ohio with a high share of seriously underwater homes included Akron (24.9 percent), Dayton (24.1 percent), Toledo (23.6 percent), and Cincinnati (15.6 percent).

Among markets with a population of at least 2 million people, Chicago had the highest share of seriously underwater homes at 22.5 percent. This was followed by Detroit (21.3 percent), Kansas City (21.2 percent), Orlando (19.1 percent), and St. Louis (17.8 percent).

RealtyTrac also analyzed 9,844 ZIP codes with at least 2,500 properties to determine which ones had the highest share of seriously underwater properties. In 29 of these ZIP codes, more than two-thirds of the residential properties were considered seriously underwater.

The highest share occurred in one metro area of St. Louis, where 79.8 percent of homes were seriously underwater. One ZIP code in the Chicago metro area had a seriously underwater share of 76.3 percent, while it stood at 74.6 percent in another area of the city.

RealtyTrac's report showed a higher number of seriously underwater homes than the most recent report issued by CoreLogic, another property analytics company. CoreLogic estimated that 92 percent of 46.7 million mortgaged properties in the U.S. had equity in the first quarter of 2016, with only 3 percent—1.5 million homes—having a loan-to-value ratio of 125 percent or more.

Equity rich

On the other end of the spectrum, RealtyTrac determined that there were about 12.38 million equity rich properties in the United States. An equity rich property is defined as having a loan-to-value ratio of 50 percent or less.

Equity rich properties accounted for 22.1 percent of all mortgaged U.S. properties in the second quarter of 2016. This share was up from 22 percent in the first quarter of the year and 19.6 percent in the second quarter of 2015. The number of equity rich homes was up by 47,694 from the previous quarter and 1.4 million from the previous year.

While the report did not indicate the share of equity rich properties in different counties, it did highlight the metro areas with the lowest share of seriously underwater properties. West Coast cities dominated this list; the share of seriously underwater homes was 1.7 percent in San Jose, 3.7 percent in San Francisco, 3.9 percent in Portland, and 4.1 percent in Oxnard-Thousand Oaks-Ventura. Austin, Texas, had a seriously underwater share of 3.9 percent.

Local characteristics

In Connecticut, the share of properties considered seriously underwater was lower than the national figure in three counties and higher in five counties. In Rhode Island, the share was lower in four counties and higher in one county.

RealtyTrac determined that New Haven County had the highest share of seriously underwater homes at 16.7 percent, or 35,432 properties. A total of 16.6 percent of homes in Windham County, or 4,707 properties, were considered seriously underwater.

In New London County, the report determined that 11,058 homes had a loan-to-value ratio of 125 percent or higher. This number represented 15.5 percent of mortgaged properties in the county.

The lowest share of seriously underwater homes in Connecticut occurred in Middlesex County, with 4,464 properties representing 9 percent of all mortgaged homes. The share was 10.7 percent in both Fairfield and Tolland Counties.

The highest share of underwater properties in Rhode Island was in Providence County, with 18,867 homes representing 14.4 percent of mortgaged properties. The lowest share—726 homes representing 5.4 percent of mortgaged homes—occurred in Bristol County.

Underwater profiles

In addition to calculating these percentages, ATTOM sought to determine the characteristics of seriously underwater properties. These included the age and value of the home as well as the congressional district and occupancy status.

More valuable homes were less likely to be seriously underwater. Only 4.9 percent of mortgaged properties worth $750,000 or more were considered seriously underwater, compared to 34.4 percent of homes worth about $100,000.

Homes purchased more recently were less likely to be seriously underwater than those purchased during or shortly before the downturn in the housing market. A total of 8.3 percent of homes purchased between 2009 and 2013 were seriously underwater, while the share rose to 26.4 percent for those bought between 2004 and 2008.

More than one in five homes that weren't owner occupied—21.8 percent—were considered seriously underwater. The share fell to 9.1 percent for owner occupied homes.

In Democratic congressional districts, 13.1 percent of homes—3.5 million properties—were seriously underwater. There were 3.2 million seriously underwater properties in Republican congressional districts, representing 10.1 percent of all mortgaged homes in these areas.