Homeowner Equity Grows
Ratio of Equity Rich to Seriously Underwater Properties Now at 14 to 1
By ATTOM Staff
ATTOM, a leading curator of real estate data nationwide for land and property data, released its first-quarter 2022 U.S. Home Equity & Underwater Report, which shows that 44.9% of mortgaged residential properties in the United States were considered equity-rich in the first quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50% of their homes estimated market values.
The portion of mortgaged homes that were equity-rich in the first quarter of 2022 inched close to half, up from 41.9% in the fourth quarter of 2021 and from 31.9% in the first quarter of 2021.
“Homeowners continue to benefit from rising home prices,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Record levels of home equity provide financial security for millions of families and minimize the chance of another housing market crash like the one we saw in 2008. But these higher home prices and rising interest rates make it extremely challenging for first time buyers to enter the market.”
The report shows that just 3.2% of mortgaged homes, or one in 31, were considered seriously underwater in the first quarter of 2022, with a combined estimated balance of loans secured by the property of at least 25% more than the property’s estimated market value. That was virtually the same as the 3.1% level of all U.S. homes with a mortgage in the prior quarter, but still well down from 4.7%, or one in 21 properties, a year earlier.
Across the country, 45 states saw equity-rich levels increase from the fourth quarter of 2021 to the first quarter of 2022 while seriously underwater percentages increased in 28 states, albeit by less than 1% in most cases. Year over year, equity-rich levels rose in 48 states and seriously underwater portions dropped in 46 states.
“It’s likely that equity will continue to grow through the rest of 2022, although home price increases should moderate as the year goes on,” Sharga said. “Rising interest rates, the highest inflation in 40 years, and the ongoing supply chain disruptions due to the war in Ukraine are likely to weaken demand and slow down home price appreciation.”
Biggest improvements in equity-rich share of mortgages in West and South
The 15 states where the equity-rich share of mortgaged homes rose most from the fourth quarter of 2021 to the first quarter of 2022 were all in the western and southern regions of the U.S. States, with the biggest increases in:
» New Mexico, where the portion of mortgaged homes considered equity-rich rose from 35.3% in the fourth quarter to 43.4% in the first quarter of 2022
» Florida (up from 46.6% to 53.6%)
» California (up from 53.7% to 60.5%)
» South Carolina (up from 35% to 41.2%)
» Montana (up from 40.5% to 45.7%)
States where the equity-rich share of mortgaged homes decreased from the fourth quarter of last year to the first quarter of this year were:
» South Dakota (down from 36% to 32.3%)
» Mississippi (down from 26.3% to 23.5%)
» Louisiana (down from 22.5% to 21.6%)
» North Dakota (down from 29.3% to 28.6%)
» Pennsylvania (down from 35.49% to 35.46%).
Largest increases in seriously underwater properties across South and Midwest
Twelve of the 15 states with the biggest increases in the percentage of mortgaged homes considered seriously underwater from the fourth quarter of 2021 to the first quarter of 2022 were spread across the South and Midwest. They were led by:
» Mississippi (share of mortgaged homes seriously underwater up from 12.2% to 17%)
» Missouri (up from 5.1% to 6.6%)
» Louisiana (up from 10% to 11.3%)
» Pennsylvania (up from 4.2% to 5.2%)
» Delaware (up from 3.7% to 4.5%).
States where the percentage of seriously underwater homes declined the most from the fourth quarter of last year to the first quarter of this year were:
» Wyoming (down from 14.3% to 10%)
» Maine (down from 4.4% to 3.1%)
» Oklahoma (down from 5.5% to 4.8%)
» Alabama (down from 5.1% to 4.6%)
» Montana (down from 3.4% to 3%)
