Rising Home Prices Continued to Boost Home Equity Gains in Q3

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As U.S. home prices continue to rise, the share of homeowners who are considered “equity rich” continues to climb, while the share who are “underwater” on their mortgages continues to shrink.

As of the end of the third quarter, about 14.4 million residential properties in the U.S. were considered equity rich, meaning that the combined estimated amount of loans secured by those properties was 50% or less of their estimated market value, according to ATTOM Data Solutions.

That’s about 26.7%, or about one in four, of the 54 million mortgaged homes in the U.S.

The report also shows that just 3.5 million, or one in 15, mortgaged homes in the third quarter of 2019 were considered seriously underwater, with a combined estimated balance of loans secured by the property at least 25% more than the property’s estimated market value. 

That’s about 6.5% of all U.S. properties with a mortgage.

“The latest numbers reveal another profound impact of the extended housing boom, as far more homeowners find themselves on the right side of the balance sheet instead of the wrong side,” says Todd Teta, chief product officer with ATTOM Data Solutions. “This is a complete turnabout from what was happening when the housing market crashed during the Great Recession.”

“There are notable equity gaps between regions and market segments,” he adds. “But as home values keep climbing, homeowners are seeing their equity building more and more, while those with properties still worth a lot less than their mortgages represent just a small segment of the market.”

States with the highest share of equity rich properties in the third quarter included California, Hawaii, Vermont, New York and Washington.

Cities with the highest shares of equity rich properties included San Jose, Calif.; San Francisco, Calif.; Los Angeles; Santa Rosa, Calif; and Honolulu.

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