One of the benefits of a booming housing market is that homeowner equity has remained strong.
A report from ATTOM Data Solutions found, in the second quarter of 2021, 34.4% of mortgaged residential properties in the country were considered equity-rich. For a property to be equity-rich, the combined estimated amount of loans for these properties is no more than 50% of their estimated market value, according to the report. This is an increase of 3.2% from the first quarter of 2021 and up 6.9% year to year. Another benefit is that there has been a decrease in homes that owe more. Only 4.1% of mortgaged homes are considered “seriously underwater” in the second quarter of 2021 which means that the loans on the property are more than 25% of the home’s estimated market value, according to the report. This is down 1.1% from the first quarter and 2.1% year to year.
The majority (48) of states in the U.S. saw an increase in equity-rich homes, as well as a decrease in seriously underwater ones. The median home price rose 11% quarterly and 22% year to year.
“The huge home-price jumps over the past year that helped millions of sellers earn big profits also kicked in big-time during the second quarter for other owners who saw their typical equity improve more than at any time in the last two years. Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country,” said Todd Teta, chief product officer with ATTOM.
States in the northeast and western parts of the U.S. saw the biggest equity gains.