IRVINE, Calif. — Let’s face it. Life under the Biden-Harris administration has hit most Americans where it hurts most, in their pockets. But the reckless fiscal policies of the administration, Americans are also grappling with staying ahead of their mortgages.
Nearly 48.3% of mortgaged residential properties in the United States were considered equity-rich in the third quarter of 2024, according to ATTOM’s latest U.S. Home Equity & Underwater Report, released on Wednesday. While down slightly from 49.2% in the second quarter, the figure remained higher than the 47.4% recorded a year ago and marks a substantial increase from pre-pandemic levels.
The equity-rich status indicates that the combined balance of loans secured by a property does not exceed half of its estimated market value. Rob Barber, CEO of ATTOM, emphasized the broader economic benefits of sustained home equity gains. “Equity remained elevated as the value of residential properties has surged consistently over the years,” Barber said. “Despite the flat pattern, home equity keeps providing a significant boost to the economy in the form of financial leverage that tens of millions of households can use to finance major purchases or investments.”
The quarterly report highlighted that while home prices held steady, minor fluctuations in equity-rich and seriously underwater properties signaled a broader cooling in the housing market. Properties classified as seriously underwater—where the combined loan amount is at least 25% higher than the home’s estimated market value—made up 2.5% of mortgaged homes in the third quarter, slightly up from 2.4% in the previous quarter but unchanged from the same period last year.
Regional variations show equity gains in the Midwest and Northeast, declines in the West
Equity-rich levels rose annually in 37 states, with the largest gains concentrated in lower-cost markets in the Midwest and Northeast. Vermont led the increases, jumping from 79.8% in Q3 2023 to 86.4% this year. Other states with notable gains included West Virginia, Connecticut, New Jersey, and Rhode Island.
However, year-over-year declines in equity-rich shares were more pronounced in higher-priced western states. Utah saw the most significant drop, falling from 56.8% to 52.4%, followed by Arizona, Colorado, Washington, and Oregon.
High-end Northeast, West regions maintain top equity-rich levels
The report noted that the highest equity-rich shares remained concentrated in high-end markets in the Northeast and West. Vermont topped the list at 86.4%, followed by Maine (62.2%), New Hampshire (61.1%), Rhode Island (60.6%), and Montana (60.5%). In contrast, states with the lowest levels of equity-rich properties were largely in the Midwest and South, including Louisiana (21.1%), Alaska (31.9%), North Dakota (33.2%), Maryland (33.2%), and Illinois (34%).
Seriously underwater mortgages stable but show slight regional shifts
While the national average of seriously underwater mortgages held steady at 2.5%, state-level changes varied. Wyoming saw the most notable improvement, with its percentage of seriously underwater properties dropping from 5.9% to 2.4% year-over-year. In contrast, Kansas experienced the sharpest increase, rising from 2.6% to 4.4%.
The report aligns with a broader trend of stability in home equity levels despite ongoing fluctuations in the housing market. Barber noted that the market is entering its typical slow season, predicting minor shifts in home equity metrics through the rest of the year.
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