Half Of Mortgaged Homes Are Equity-Rich

Nearly half of mortgaged homes in the U.S. were equity-rich in Q2, with the most equity gains concentrated in the South, according to ATTOM’s Q2 2022 U.S. Home Equity & Underwater Report.

The report found that 48.1% of mortgaged residential properties had an estimated worth that topped their loan balances by 50% or more.

That’s up from 44.9% in Q1 2022 and 34.4% YOY. At least half of all mortgagees in 18 states were equity-rich, up from just 3 states at the same time last year.

It’s the ninth consecutive quarter in which the number of equity-rich homes increased.

ATTOM also found that only 2.9% of mortgaged homes were considered seriously underwater in Q2, down from 3.2% in Q1 and 4.1% YOY.

“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 Sharga, executive 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.”

As a result of increased home values, cash-out refinancing jumped in 2021 to $1.2 trillion, its highest level since 2005. Cash-outs have declined recently as interest rates rise, down 42.2% from last year’s highs, and home price appreciation is slowing.

But appreciation is still expected to end the year at 10%, down from 2021’s 20% but still leaving homeowners with higher property values.

Nationwide, 49 states saw the number of equity-rich properties rise while seriously underwater percentages dropped in 46 states.

Though Wyoming took the top spot for the biggest growth in number of equity-rich homes (+7.8%), most growth took place in the South, with seven of the 10 most equity-rich states. Maine tied Wyoming with an increase of 7.8%, followed by Florida (+6.8), Mississippi (+5.6%), and South Carolina (+5.3%).

But the West still has the largest share of equity-rich homes overall.

The share of equity-rich homes fell in New Jersey and rose the least in Utah, Idaho, North Dakota, and West Virginia.