Homeowners are four times as likely to be equity-rich as to be underwater, according to a new report from ATTOM Data Solutions.
According to the report, 14.5 million residential properties in the US were considered “equity-rich” in the fourth quarter, meaning that the combined estimated amounts of loans on the property was 50% or less of the property’s estimated market value.
The number represents 26.7% of the 54.5 million mortgaged homes in the US, according to the report. Meanwhile, just 3.5 million, or one in 16, mortgaged homes were seriously underwater in Q4. A home is considered seriously underwater if the combined loans on that home are worth at least 25% more than the property’s estimated value. That figure accounts for 6.4% of all US properties with a mortgage, down from 6.5% in Q3 of 2019.
“Homeownership continued boosting household balance sheets across the United States in the fourth quarter of 2019, as people paying off mortgages were much more likely to be in equity-rich territory than seriously underwater,” said Todd Teta, chief product officer with ATTOM Data Solutions. “That marked yet another sign of how much the country has benefited from an eight-year housing-market boom. Some big gaps in equity levels persist between regions and market segments. But as home values keep climbing, financial resources keep building for homeowners, which provides them with leverage to make home repairs, help their children through college or take on other major expenses.”
The highest shares of equity-rich properties were in the Northeast and West, led by California, where 42.8% of properties were equity-rich. Vermont (39.2%), Hawaii (38.8%), Washington state (35.4%) and New York (35.1%) rounded out the top five.
Louisiana had the lowest percentage of equity-rich properties at 13.6%, followed by Oklahoma (14.9%), Illinois (15.3%), Arkansas (16.3%) and Alabama (16.5%).