How Many U.S. Homeowners Remain Equity-Rich? MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

 According to quarter three 2024 U.S. Home Equity & Underwater Report released by ATTOM, some forty eight point three percent of mortgaged residential properties in the US were deemed equity-rich in quarter three, which means that the total estimated amount of loan balances secured by those properties was no more than half of their estimated market values.

From a recent peak of forty nine point two percent in quarter two of 2024, that level was lower. Nonetheless, it remained at a historically high level and was up from forty seven point four percent a year earlier, illustrating one of the long-lasting consequences of a nationwide housing market boom that has lasted for more than ten years.

Regarding the percentage of home mortgages that were significantly underwater, a similar trend surfaced during the third quarter. The combined estimated balances of loans secured by properties that are at least twenty five percent higher than the projected market values of such properties only accounted for two point five percent of mortgaged residences. Compared to the two point four percent recorded in the previous quarter and the third quarter of 2023, that was marginally worse.

“Homeowner equity typically mirrors home-price trends, and the third quarter of this year followed that pattern. Equity remained elevated as the value of residential properties has surged consistently over the years. However, it held steady this quarter, reflecting the cooling of earlier sharp price increases,” said Rob Barber, CEO for ATTOM. “Despite the flat pattern, home equity keeps providing a significant boost to the economy in the form of financial leverage that tens of millions of households can use to finance major purchases or investments.”

He added that “we can expect to see small movements up or down over the coming months as the housing market moves into its annual slow season.”

The most recent equity pattern occurs when the market is still robust over the majority of the country, but it is also subject to a number of factors that might either keep it rising or flatten it down. The percentage of equity-rich mortgaged residences in the third quarter of 2024 (forty eight point three percent) was still significantly higher than the twenty six point five percent level observed in the first quarter of 2020. From the second quarter to the third quarter of 2024, it fell by less than two percentage points in twenty eight percent of the fifty U.S. states, although it remained upward annually in thirty seven states.

Annual increases generally tilted more toward low- and mid-priced markets around the country, concentrated in the Midwest and Northeast regions. The increases were led by:

1. Vermont (portion of mortgaged homes considered equity-rich increased from seventy nine point eight percent in quarter three of 2023 to eighty six point four percent in quarter three of 2024)
2. West Virginia (up from thirty point five percent to thirty seven percent)
3. Connecticut (up from forty one point five percent to forty seven point seven percent)
4. New Jersey (up from forty five point nine percent to fifty two percent)
5. Rhode Island (up from fifty four point seven percent to sixty point six percent)

In Most States, Seriously Underwater Mortgage Levels Fluctuate Little by Little

Conversely, equity-rich levels decreased more frequently in western states, mostly in Utah (from fifty six point eight percent to fifty two point four percent year-over-year), Arizona (from fifty four point three percent to fifty percent), Colorado (from fifty one point one percent to forty eight percent), Washington (from fifty six point seven percent to fifty four point six percent), and Oregon (from fifty two percent to fifty point eight percent).

During quarter three, the percentage of mortgaged properties in the United States that are deemed substantially underwater hardly changed. At one in forty, it was unchanged from one in forty two in the second quarter but the same as a year earlier. It was also far lower than the one in fifteen ratio that was noted in 2020. While it was still improved annually in twenty four states, the rate deteriorated every three months in thirty states.

West Virginia (down from four point six percent to three point eight percent), Louisiana (down from ten point eight percent to ten point one percent), Illinois (down from four point four to four point one percent), New Jersey (down from one point nine to one point six percent), and Wyoming (down from five point nine percent in quarter three of 2023 to two point four percent in quarter three of 2024) saw the largest annual improvements in seriously underwater mortgages.

The largest year-over-year increases in the percentage of seriously underwater homes during quarter three of 2024 were in Kansas (up from two point six to four point four percent), Utah (up from one point eight to two point four percent), South Dakota (up from two point six to three point one percent), Missouri (up from three point nine to four point three percent) and Colorado (up from one point seven to two percent).

High-End Markets Clustered in Northeast, West Continues to Benefit from Best Equity-Rich Rates

Once more, in quarter three 2024, the Northeast and West states had the biggest concentrations of equity-rich mortgaged houses in the United States. The states with the biggest percentages were Rhode Island (sixty point six percent), Maine (sixty two point two percent), New Hampshire (sixty one point one percent), Montana (sixty point five percent), and Vermont (eighty six point four percent of mortgaged residences were equity-rich).

The Midwest and South accounted for nine of the ten states with the lowest percentages of equity-rich properties in quarter three 2024. Alaska (thirty one point nine percent), North Dakota (thirty three point two percent), Maryland (thirty three point two percent), Illinois (thirty four percent), and Louisiana (twenty one point one percent of mortgaged homes were equity-rich) had the least percentages.

The largest percentage of mortgaged houses that were equity-rich during the third quarter was found in premium markets with median property values over $450,000, out of one hundred and seven metropolitan statistical regions with a population of at least five hundred thousand in the country. property Seller Profit Margins Fall Slightly Across U.S. as Housing Market Slows During Third Quarter, according to this ATTOM analysis on property values.

San Jose, CA (sixty eight point seven percent equity-rich, with a median home price of $1.5 million in quarter three); Portland, ME (sixty four point six percent, with a median price of $520,000); San Diego, CA (sixty four point one percent, with a median price of $885,000); Los Angeles (sixty three point nine percent, with a median price of $949,375); and Buffalo, NY (sixty three point seven percent, with a median price of $268,000) were the top four.

The leader in the South was Knoxville, TN (sixty point seven percent, with a median price of $345,949) while the Midwest was led again by Grand Rapids, MI (fifty five percent, with a median price of $327,520). Metro areas with the lowest percentages of equity-rich properties in quarter three of 2024 remained mostly in lower-priced markets of the South and Midwest.

The smallest levels were found in:

1. Baton Rouge, LA (fifteen point eight percent of mortgaged homes were equity-rich, with a third-quarter median home price of $223,564)
2. New Orleans, LA (twenty six point nine percent, with a median price of $242,900)
3. Little Rock, AR (thirty point one percent, with a median price of $215,844)
4. Virginia Beach, VA (thirty point two percent, with a median price of $330,000)
5. Jackson, MS (thirty point two percent, with a median price of $285,407)

Top Equity-Rich Counties Again Concentrated in Midwest

Among one thousand seven hundred and fifty one counties that had at least two thousand five hundred homes with mortgages in the third quarter of 2024, fourteen of the top twenty equity-rich locations were spread across the Midwest, with Michigan leading the way.

Counties with the highest share of equity-rich properties were Chittenden County (Burlington), VT (ninety one point nine percent equity rich); Benzie County (Beulah), MI (ninety point nine percent); Portage County (Stevens Point), WI (eighty eight point eight percent); Manistee County, MI (eighty eight point eight percent) and Washington County (Montpelier), VT (eighty eight point five percent).

Some nineteen of the twenty counties with the smallest share of equity-rich homes in quarter three of 2024 were in the South. The lowest were in Vernon Parish (Leesville), LA (seven percent equity rich); Long County, GA (south of Savannah) (nine point five percent); Ascension Parish, LA (outside Baton Rouge) (eleven point three percent); Acadia Parish, LA (outside Lafayette) (twelve point five percent) and Bossier Parish, LA (thirteen point seven percent).

Midwest and South Have the Most Seriously Underwater Mortgage Rates

The Midwest and South regions had nineteen of the twenty states with the highest shares of mortgages that were seriously underwater in quarter three of this year. The top five were Louisiana (ten point one percent seriously underwater), Mississippi (seven point two percent), Kentucky (five point five percent), Arkansas (five point four percent) and Iowa (five point two percent).

The smallest shares were in Vermont (point seven percent seriously underwater), Rhode Island (point nine percent), New Hampshire (one percent), Massachusetts (one point one percent) and California (one point four percent). Among different regions, one of every twenty nine mortgaged homes was seriously underwater in the Midwest, one of every thirty seven in the South, one of every fifty in the Northeast and one of every sixty one in the West.

Among one hundred and seven metropolitan statistical areas with a population greater than five hundred thousand, those with the largest shares of mortgages that were seriously underwater in the third quarter of 2024 were Baton Rouge, LA (eleven point one percent); New Orleans, LA (seven point four percent); Jackson, MS (six point six percent); Kansas City, MO (five point five percent) and Little Rock, AR (five point two percent). The portion of mortgages that were seriously underwater increased quarterly in eighty, or seventy five percent, of the metro areas in the U.S. with enough data to analyze. They were up, year-over-year, in sixty one percent of the metro areas analyzed.

To read the full report, including more data, charts, and methodology, click here.

The post How Many U.S. Homeowners Remain Equity-Rich?  first appeared on The MortgagePoint.

FIRST TIME HOMEBUYERS

Buyer’s Agents Explained