Half of US Mortgaged Homes Now Considered Equity-Rich; Seriously Underwater Portion of Mortgages Dips Below 3 Percent; Sixteen Times as Many Mortgages are Equity Rich versus Seriously Underwater
IRVINE, Calif., Aug. 4, 2022 /PRNewswire/ — ATTOMa leading curator of real estate data nationwide for land and property data, today released its second-quarter 2022 US Home Equity & Underwater Report, which shows that 48.1 percent of mortgaged residential properties in the United States were considered equity-rich in the second quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.
The portion of mortgaged homes that were equity-rich in the second quarter of 2022 increased from 44.9 percent in the first quarter of 2022 and from 34.4 percent in the second quarter of 2021. The latest increase, to virtually half of all mortgage payers, marked the ninth straight quarterly rise in the portion of homes in equity-rich territory. The report found that at least half of all mortgage-payers in 18 states were equity-rich in the second quarter, compared to only three states a year earlier.
The report also shows that just 2.9 percent of mortgaged homes, or one in 34, were considered seriously underwater in the second quarter of 2022, with a combined estimated balance of loans secured by the property of at least 25 percent more than the property’s estimated market value. That was down from 3.2 percent of all US homes with a mortgage in the prior quarter and 4.1 percent, or one 24 properties, a year earlier.
“After 124 consecutive months of home price increases, it’s no surprise that the percentage of equity rich homes is the highest we’ve ever seen, and that the percentage of seriously underwater loans is the lowest,” said Rick Shargaexecutive vice president of market intelligence at ATTOM. “While home price appreciation appears to be slowing down due to higher interest rates on mortgage loans, it seems likely that homeowners will continue to build on the record amount of equity they have for the rest of 2022.”
Across the country, 49 states saw equity-rich levels increase from the first quarter of 2022 to the second quarter of 2022, while seriously underwater percentages dipped in 46 states. Year over year, equity-rich levels rose in all 50 states and seriously underwater Portions dropped in 46 states.
The equity scenario continued improving in the second quarter for homeowners around the US, mainly because home values kept soaring. After a flat first quarter, the median single-family home price shot up another 9 percent quarterly and 15 percent annually during the Spring of this year to a new high of $346,000. For owners keeping up with mortgage payments – and even many that weren’t – that meant a widening gap between what they owed and what their homes were worth, boosting more home values into equity-rich status.
In addition, down payments for recent buyers have grown from about 5 percent to 7 percent over the past couple of years, resulting in new owners starting off with more equity.
In the second quarter of 2022, equity continued on a relentless upward path despite significant economic uncertainties connected to home-mortgage rates doubling this year, inflation soaring at 40-year highs, rising fuel costs and other issues. While the chances of even more improvement remain uncertain, there is little immediate sign that equity gains will flatten out, especially as home buyers keep chasing a historically tight supply of properties for sale.
Seven of the 10 states where the equity-rich share of mortgaged homes increased most from the first quarter of 2022 to the second quarter of 2022 were in the southern region of the US The biggest increases were in Wyomingwhere the portion of mortgaged homes considered equity-rich rose from 26.1 percent in the first quarter to 33.9 percent in the second quarter, Maine (up from 48.5 percent to 56.3 percent), Florida (up from 53.6 percent to 60.4 percent), Mississippi (up from 23.5 percent to 29.1 percent) and South Carolina (up from 41.2 percent to 46.5 percent).
States where the equity-rich share of mortgaged homes decreased, or went up the least, from the first quarter to the second quarter of this year were New Jersey (down from 38.6 percent to 37.9 percent), Utah (up from 63.6 percent to 64.3 percent), Idaho (up from 68.8 percent to 69.5 percent), North Dakota (up from 28.6 percent to 29.5 percent) and West Virginia (up from 26.9 percent to 28.4 percent).