A new report from ATTOM Data shows that equity-rich locales remain concentrated in certain areas, with at least half of all homes with a mortgage considered equity rich located in more than 40% of U.S. zip codes. A mortgage is considered “equity-rich” if the remaining loan balance equals half the property value or less.
A deeper dive into ATTOM’s Year-End Home Equity and Underwater Report, for Q4 2024 shows 47.7% of mortgaged properties in the U.S. were considered equity-rich. This was a decline from 48.3% in Q3 2024 and the prior three-month period, which saw a peak of 49.2% of properties being equity-rich. The level of equity-rich properties was still on the rise year-over-year, increasing from 46.1% in Q4 2023. This showcases one of the most pronounced benefits of the 13-year housing boom.
Mortgages considered seriously underwater, wherein the remainder of the mortgage exceeds 25% of the total value of the home, comprised 2.5% of mortgages, the report showed. This was unchanged from Q3 2024 and virtually unchanged year-over-year from 2.6% in Q4 2023.
“The last few months of 2024 marked pretty much a holding pattern for the housing market,” said ATTOM CEO Rob Barber. “That’s typical for the slower fall home-buying season, but it certainly wasn’t a downer for homeowners across the country who are sitting on historically high levels of property equity thanks in large part to the endless increases in home values over more than a decade. Nearly half of all residential mortgage payers in the U.S. have paid off at least half their loans, leaving many with six-figure levels of wealth available to leverage anything from new home purchases to starting new businesses to paying off major expenses.”
Out of 9,149 U.S. zip codes that had at least 2,000 residential properties with mortgages in Q4 2024, there were 3,882 (42.4%) where at least half the mortgaged residential properties were equity-rich, and among the top 50 zip codes, 28 were in California or Massachusetts, eight were in the Martha’s Vineyard area, five in Irvine, California and four in Santa Barbara, California, the report noted.
The market appears saturated in equity-rich holdings, with all segments and price points of the American socioeconomic spectrum being affected, ATTOM stated. The areas where equity-rich homes were most pronounced annually were low- to mid-priced markets in the Midwest and Northeast. That pattern was somewhat predictable though, since those areas absorbed a dropoff in price on a quarterly basis that reversed course later in the year.
Annual increases of this type were most pronounced in Rhode Island (portion of equity-rich homes rose from 54.6% in Q4 2023 to 60.8 in Q4 2024), Missouri (37.3% Q4 2023 to 43% Q4 2024), Connecticut (42.4% Q4 2023 to 47.9% Q4 2024), New Jersey (46.8% Q4 2023 to 52.3% Q4 2024) and Illinois (28% Q4 2023 to 33% Q4 2024).
On the flipside of the equity-rich coin, many Western territories saw their share of equity-rich properties decline. This was led by Florida (YoY decline from 54.3% to 50.9%), Utah (53.7% to 51.1%), Arizona (52.7% to 50.9%), Oregon (51.2% to 49.6%) and Idaho (57.6% to 56.1%).
The top five states for equity-rich levels of mortgaged properties were Vermont (86.7%), New Hampshire (61.4%), Maine (61.1%), Rhode Island (60.8%) and Montana (60.1%).
On the opposite end of the equity-rich spectrum were the Midwestern and Southern regions, with Louisiana (22.4%) clocking in with the lowest clip of equity-rich mortgages, followed by Alaska (31.5%), North Dakota (32.4%), Maryland (32.6%) and Illinois (33%).
For the 107 metros with a population of at least half a million, the markets with the highest equity-rich levels were San Jose, California (68.5% equity-rich), Los Angeles, California (64%), Portland, Maine (63.5%), San Diego, California (63.4%) and Buffalo, New York (60.9%). The portion of equity-rich markets declined in 69 out of 107 metros (64%) for Q4 2024, but increased on an annual basis in 67 of those markets (63%).
Barber added that “We are likely to see more of the same steady pace over the next few months before heading into the spring buying season, which will say a lot about whether the housing market keeps roaring ahead and boosts home equity even further.”
To see the report in full, click here.
