Homeowner Equity Sees Boost as Prices Remain High

More than 40% of mortgaged properties were considered equity-rich in the fourth quarter of 2021.

According to ATTOM, 41.9% of mortgaged properties had loan balances of no more than 50% of their estimated market values. This is up from 39.5% the previous quarter and up from 30.2% year over year. Only 3.1% of mortgaged homes were considered seriously underwater, which means the balance of loans on the property is at least 25% more than the estimated value of the property, or that homeowners owe 125% of the property’s value to the bank. This is down from 3.4% in the third quarter and 5.4% year over year. In the U.S., 94% of states, including the District of Columbia, saw their percentage of equity-rich homes increase, while the amount of seriously underwater properties dropped in 90% of states, including the District of Columbia.

For 8,651 zip codes with more than 2,000 residential properties with mortgages, 29% had 50% or more equity-rich properties, mostly in California, Texas and Massachusetts, while more of the seriously underwater properties tended to be in the South and Midwest. Among those same zip codes, only 18, or 0.2% had more than 25% of properties considered seriously underwater. Among metros with at least 500,000 residents, Scranton had one of the highest percentages of seriously underwater mortgages, at 7.1%. For those metros (106 represented), 87% saw a decrease in seriously underwater properties from quarter to quarter and 96% saw a drop year over year.

At a time with sellers’ profits are surging, homeowners staying in place are reaping equity. “For now, homeowners are sitting pretty as the wealth they have tucked away in their homes keeps growing,” said Todd Teta, chief product officer with ATTOM.