by ATTOM Staff
In the second quarter of 2023, ATTOM, published its Q2 2023 Home Equity and Underwater report indicating positive trends in the US housing market. The report revealed that 49% of mortgaged residential properties in the US were considered equity-rich, meaning that the estimated loan balances for these properties were no more than half of their estimated market values. This was an increase from the previous quarter’s 47%, marking the highest point in at least four years.
This rise in equity-rich properties followed two quarters of decline due to a temporary housing market slowdown. The report attributed this upturn to recovering home prices across the US. The data indicated that the levels of equity-rich mortgage holders increased in 45 out of 50 states during this period.
In contrast, the number of seriously underwater homes, where the loan balances exceeded the property’s market value by at least 25%, decreased. Only 2.8% of mortgaged homes were seriously underwater in the second quarter, the lowest figure since 2019.
The increase in equity levels was attributed to rising home values, with the median home value in the US reaching $350,000, a 10% increase from the previous quarter. This rebound was driven by various factors, including decreased mortgage rates and consumer price inflation, along with an improved stock market and low unemployment rates.
However, there was a note of caution, as the housing market remained subject to fluctuations. The report emphasized that the improvement could be temporary, given the presence of changing market forces, such as increased mortgage rates.
The analysis also showed that the Midwest saw the largest increase in the equity-rich share of mortgages, with Wisconsin, Michigan, and Ohio experiencing notable gains. Conversely, the South and West regions saw a slight decrease in equity-rich properties.
The West had the highest proportion of equity-rich properties, with states like Vermont, California, and Florida leading the rankings. The Midwest and South regions had the highest percentages of seriously underwater homes.
Overall, the report suggested that the US housing market had experienced positive growth in terms of equity-rich properties due to rebounding home prices and other favorable economic factors. However, it emphasized the need for continued monitoring of market trends to understand whether the improvements were sustainable.
To learn more and access more detailed data or get the data behind the stories, contact one of ATTOM’s data experts.