The share of residential properties that are considered “equity rich” decreased to 45.8% in the first quarter, down from 46.1% in the fourth quarter and down from 47.2% in the first quarter of 2023, hitting the lowest point in two years, according to ATTOM’s U.S. Home Equity & Underwater Report.
By “equity-rich,” ATTOM means that the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market values.
The report also shows that the share of properties that are seriously underwater increased slightly from 2.6% to 2.7% of all residential mortgages.
Seriously underwater mortgages are those with combined estimated balances of loans secured by properties that are at least 25 percent more than those properties’ estimated market values.
“Homeowner balance sheets continue to benefit in a huge way from the boom times in the form of elevated equity that can be used to help finance all kinds of things, from home renovations to business startups,” says Rob Barber, CEO for ATTOM, in the report. “Still, the windfalls are starting to erode bit by bit amid mounting signs that the market is no longer so super-heated.”
“It’s too early to make any broad statements about the market direction, especially coming off the typically slower fall and winter months,” Barber adds. “But amid the recent trends, this year’s spring buying season will be of heightened importance in telling us if there is a new long-term market pattern developing.”
Photo: Pepi Stojanovski