Homeowners Considered Equity-Rich on the Rise

Nearly half of homeowners with a mortgage were considered equity-rich in the first quarter of 2022.

According to ATTOM Data Solutions, for 44.9% of homes with mortgages, the combined amount of loan balances was no more than 50% of their home’s market value. This is an increase of 4% from the previous quarter and up 13% year over year. Only 3.2% or one in 31, of homes with a mortgage are considered seriously underwater, or with a combined balance of loans are least 25%  more than the home’s estimated market value. This is a decrease of 1.5% year over year.

Ninety percent of states had equity-rich levels rise from the last quarter of 2021 to the first of 2022. Year over year, equity-rich levels increased in 48 states and the percentage of seriously underwater homes fell in 46 states. Growth in home prices has assisted with so many homeowners with becoming equity-rich. According to Realtor.com®, the median home price nationwide was $425,000 in April, up 14% year over year. In Pennsylvania, the median price was $204,274 in April, up 13.4% over the same time last year. Pennsylvania saw a slight decrease in equity-rich properties from the last quarter of 2021 to the first quarter of 2022, at 35.49% compared to 35.46%. Pennsylvania also had an increase in seriously underwater homes, rising from 4.2% in the last quarter to 5.2% in the first quarter. Philadelphia also had a high number of seriously underwater properties, at more than 25%.

The report also found that 90% of homeowners at risk for foreclosure had at least some equity in their property, most likely offering them other options beyond foreclosure.