Homeowners were able to reap the benefits of the frenzied housing market last year as new data from ATTOM Data Solutions suggests that nearly one of every two mortgaged homes were “equity rich” in the final quarter of 2021.
ATTOM released its Q4 2021 U.S. Home Equity & Underwater Report on Feb. 3, which showed that 41.9% of mortgaged residential properties in the United States were considered equity-rich. The report defined equity rich as homes with a combined estimated amount of loan balances secured by those properties was no more than 50% of their estimated market values.
The portion of equity-rich mortgaged homes in Q4 2021 climbed from 39.5% in the third quarter of 2021 and from 30.2% in the fourth quarter of 2020.
The report also shows that just 3.1% of mortgaged homes—one in 32 properties—were considered seriously underwater in the fourth quarter of 2021, down from 3.4% of all U.S. homes with a mortgage in the prior quarter and 5.4%, or one in 18 houses, a year earlier.
Major takeaways
- 9% of mortgaged residential properties in the United States considered equity-rich were up in Q4 2021; up 39.5% in Q3 2021 and 30.2% YoY.
- Forty-eight states saw equity-rich levels increase from the third quarter to the fourth quarter of 2021, while YoY levels rose in 49 states,
- The western and southern states experienced the largest quarterly improvement in the share of equity-rich homes (13 of the 15 states).
- States with the most significant increases were Tennessee, North Carolina, Nevada, Georgia and Arizona.
- Seriously underwater percentages decreased in 46 states from Q3 2021 and 48 states, including the District of Columbia, YoY.
- The south and midwest saw the largest declines in underwater properties (14 of the 15 states).
- The largest declines share of mortgaged homes considered seriously underwater were led by Mississippi, Maine, Iowa, West Virginia and Arkansas.
What this means
“Another quarter, another boost to the balance sheets of homeowners in most of the United States—that was the story from the fourth quarter of last year. As home prices kept rising, so did the equity built up in residential properties, to the point where close to half of all mortgage payers around the country found themselves in the equity-rich territory.”
“No doubt, there are market metrics that pose warnings about how long the boom can last and equity can keep improving. We keep watching those closely. But for now, homeowners are sitting pretty as the wealth they have tucked away in their homes keeps growing.” — Todd Teta, chief product officer with ATTOM.
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
