The spike in equity-rich homeowners is driven largely by the fact that people are staying in their homes longer before selling and thus amassing more equity. Homeowners are considered equity rich if they have a loan-to-value ratio of 50% or lower, according to ATTOM.
The number of underwater homeowners, meanwhile, was down in the third quarter. At the end of Q3, about 6 million homeowners, or 10.8% of all homeowners with a mortgage, were underwater. That’s a drop of more than 854,000 from a year ago.
“Close to one in every five US homeowners with a mortgage is now equity rich thanks to a combination of rising home prices and lengthening homeownership tenures,” said Daren Blomquist, ATTOM senior vice president.
“Median home prices increased on a year-over-year basis for the 18th
consecutive quarter in Q3 2016, and homeowners who sold in the third quarter had owned their home an average of 7.94 years – a new high in our data and substantially higher than the average homeownership tenure of 4.26 years pre-recession. As homeowners stay in their homes longer before moving up, they are amassing more home equity
San Jose had the highest share of equity-rich homeowners with 55.7%, according to ATTOM. San Jose was followed by San Francisco (49.8%), Honolulu (39.3%), Los Angeles (38.2%) and Pittsburgh (34.5%).
More than 13 million US homeowners were equity rich in the third quarter, according to new data from ATTOM Data Solutions. That’s 23.4% of all US homeowners with a mortgage, a 2.6 million spike from the same period last year.