More mortgaged homes are equity-rich in Q3

by Candyd Mendoza08 Nov 2019

One in four mortgaged homes in the United States were considered equity-rich, according to ATTOM's latest Home Equity and Underwater Report.

ATTOM tags a home as equity-rich if its mortgage balance is 50% or less of its estimated market value.

Of the 54 million mortgaged homes nationwide, 14.4 million residential properties, or 26.7%, were equity-rich in the third quarter.

California, with 40.8%, has the highest share of equity-rich properties. Hawaii (39.2%), Vermont (39%), New York (35.7%), and Washington (35.6%) rounded out the top five states with the most equity-rich properties.

"The latest numbers reveal another profound impact of the extended housing boom, as far more homeowners find themselves on the right side of the balance sheet instead of the wrong side," said Todd Teta, chief product officer of ATTOM Data Solutions. "This is a complete turnabout from what was happening when the housing market crashed during the Great Recession."

In comparison, only 3.5 million mortgaged homes were considered seriously underwater in Q3 2019, representing just 6.5% of all US properties with a mortgage. The combined mortgage balance of these homes was at least 25% more than their estimated market value.

The states with the highest shares of mortgages that were seriously underwater were all in the South and Midwest regions, led by Louisiana (16.5%), Mississippi (15.8%), West Virginia (14.2%), Iowa (14%), and Arkansas (13.1%).

"There are notable equity gaps between regions and market segments," Teta said. "But as home values keep climbing, homeowners are seeing their equity building more and more, while those with properties still worth a lot less than their mortgages represent just a small segment of the market."