About 48% of mortgaged residential properties in the U.S. were considered “equity-rich” in the third quarter, down from a recent peak of 49.2% hit in the second quarter but up from 47.4% a year earlier, according to ATTOM’s most recent U.S. Home Equity & Underwater Report.
By “equity rich” ATTOM means the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market values.
Just 2.5% of mortgaged homes were underwater, up from 2.4% in the second quarter and flat compared with the third quarter of 2023.
ATTOM defines underwater as when the loan balance is 25% more than the property’s estimated market value.
“Homeowner equity typically mirrors home-price trends, and the third quarter of this year followed that pattern,” says Rob Barber, CEO for ATTOM. “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. 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.
“We can expect to see small movements up or down over the coming months as the housing market moves into its annual slow season,” Barber adds.
The latest equity pattern comes as the market remains strong throughout most of the nation but also faces a mix of forces that could either keep it going upward or flatten it out.
Equity-rich shares of mortgages dipped quarterly but remain up annually in majority of states.
ATTOM notes that the share of mortgaged homes that were equity-rich during the third quarter, at 48.3%, is far above the 26.5% level recorded in early 2020.
Photo: Alexander Grey