IRVINE, CA — ATTOM has released its second quarter 2024 U.S. Home Equity & Underwater Report, revealing that nearly half of mortgaged residential properties in the United States are now considered equity-rich. This indicates that the combined loan balances secured by these properties are no more than half of their estimated market values.
In the second quarter of 2024, 49.2 percent of mortgaged homeowners were in equity-rich territory, up from 45.8 percent in the first quarter. This rise marks a reversal of three consecutive quarterly declines and is one of the most significant gains in the past five years.
While equity-rich levels improved, the report also shows a decline in the portion of home mortgages that were seriously underwater. Only 2.4 percent of mortgages, or one in 42, were seriously underwater, down from 2.7 percent in the prior quarter. Seriously underwater mortgages have loan balances at least 25 percent higher than the properties’ market values.
The equity gains are attributed to a spike in home prices during the 2024 Spring buying season, with the median national price rising 9 percent quarterly to a record $365,000. This price increase has widened the gap between home values and loan amounts, boosting equity levels.
“Homeowner wealth took a notable turn for the better during the second quarter as equity levels piggybacked on some of the biggest home-price spikes we’ve seen in recent years,” said Rob Barber, CEO of ATTOM. “After a period where equity seemed stagnant or even declining, this brought another boost of good news for homeowners from the enduring housing market boom.”
The report highlights that the housing market rebounded from several sluggish quarters of price variations. Contributing factors included steady mortgage rates around 7 percent for a 30-year fixed loan, a national unemployment rate below 4 percent, and thriving investment markets.
Equity-rich levels increased in 48 of the 50 U.S. states from the first to the second quarter of 2024, with notable gains in lower-priced markets like Kentucky and Illinois. However, equity-rich levels remained flat in Utah and South Dakota, with only slight increases in North Dakota, California, and Louisiana.
Conversely, the share of seriously underwater mortgages decreased in most states, with significant improvements in Wyoming, Kentucky, and Illinois. Only Utah and South Dakota saw slight increases in seriously underwater mortgages.
The highest levels of equity-rich mortgaged properties were in Northeast and West regions, with Vermont leading at 83.5 percent. Meanwhile, the South and Midwest had the lowest equity-rich levels, with Louisiana at the bottom with 21 percent.
Among metropolitan areas with over 500,000 residents, upscale markets like San Jose, Miami, and San Diego had the highest portions of equity-rich properties. In contrast, Baton Rouge and New Orleans had the lowest.
Counties with the highest shares of equity-rich properties were predominantly in the Midwest and Northeast, led by Chittenden County in Vermont. Conversely, the lowest shares were in Southern counties like Vernon Parish in Louisiana.
Across 9,120 U.S. zip codes, nearly half had at least 50 percent of mortgaged properties considered equity-rich. California, Florida, and Texas zip codes dominated this list.
The Midwest and South had the highest shares of seriously underwater mortgages, with Louisiana at the top. In metro areas, Baton Rouge had the highest share of seriously underwater mortgages, while Vicksburg, MI, led among zip codes.
This report underscores the dynamic nature of the housing market and the varying regional impacts on homeowner equity.
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