Number of Equity-Rich Homes Increases

Nearly 40% of mortgaged residential properties in the country are considered equity-rich as of the third quarter of 2021.

According to ATTOM Data Solutions, for a home to be considered equity-rich, “the combined estimated amount of loan balances secured by those properties was no more than 50% of their estimated market value.” Compared to the second quarter of 2021, homes that are equity-rich saw a 5.1% increase from 34.4% and compared to the third quarter of 2020, that number increased 11.2% from 28.3%. Forty-six states saw their parentage of equity-rich homes jump in the third quarter.

Additionally, homes that are considered seriously underwater, or a mortgaged property that has a combined balance of loans on the property that exceeds the property’s value by 25% or more, dropped to 3.4%, a decrease from 4.1% in the second quarter and down from 6% a year ago. This represents one in 29 homes. The Scranton region had a higher than average number of mortgaged properties considered seriously underwater at 8.4%, one of the highest in the nation. Among areas with more than 500,000 residents, 88% had a decrease in seriously underwater properties quarter to quarter and 96% had a year to year drop. Forty-seven states saw their percentage seriously underwater properties decrease in the third quarter.

Thanks to the increase in home prices over the past few years, specifically the last two years, so many more homeowners are having higher equity and less owners struggling. According to the report, home prices jumped 16% from the third quarter in 2020 and 4% from the previous quarter. While that may not be good news for buyers, owners and sellers are reaping the benefits.