Nearly half of residential properties with mortgages in the United States were equity-rich in the second quarter, according to the latest data from Attom.
“Equity-rich,” as defined by Attom, means that the combined estimated amount of mortgage balances for those properties is less than half of their estimated market value. Some 49.2% of mortgages homes nationwide fit that description, up from 45.8% in the first quarter.
The uptick — one of the largest in the past five years, according to figures from Attom — brought the share of equity-rich properties to a high point reached last spring. Prior to that, the percentage of equity-rich homes had dropped for three straight quarters.
“Homeowner wealth took a notable turn for the better during the second quarter as equity levels piggybacked on some of the biggest home-price spikes we’ve seen in recent years,” said Attom CEO Rob Barber. “After a period where equity seemed stagnant or even declining, this brought another boost of good news for homeowners from the enduring housing market boom. Supplies of homes for sale remain limited these days and buyer demand is typically elevated during the summertime. So, it should be no surprise if home values go even higher and take equity along for the ride.”
The second quarter’s equity gains were driven by home prices during the spring buying season, which surged despite tepid activity. Amid soft (but improving) inventory, the median national home price vaulted 9% quarter over quarter, reaching a new record high of $365,000.
The share of mortgages that were equity-rich grew in 48 states quarter over quarter (just Utah and South Dakota saw no change) and in 31 states year over year. The largest quarterly pickups were in lower-priced areas in the South and Midwest, led by Kentucky, where the share of equity-rich homes jumped from 28.7% in Q1 to 37.4% in Q2. Illinois (from 28.3% to 36.1%), Missouri (38.3% to 45.5%), Oklahoma (28.1% to 34.5%) and Alabama (35.7% to 41.9%) saw similar increases.
On the other side of the spectrum, the largest shares of seriously underwater mortgages during the second quarter were also in the same areas. Eighteen of the 20 states with the highest shares were in the Midwest and South, dubiously topped by Louisiana (where 10.5% of mortgaged homes were seriously underwater), Mississippi (6.8%), Kentucky (6.3%), Arkansas (5.4%) and Iowa (5.2%).
