One in Four Mortgaged Properties in U.S. Are Now Rich in Home Equity

One in Four Mortgaged Properties in U.S. Are Now Rich in Home Equity

One in four U.S. properties that have a mortgage are now considered to be rich in home equity or “equity rich,” according to a report by ATTOM Data Solutions.What does this mean? A property is considered “equity rich” when the combined amount of all loans secured by the property is 50% or less of the property’s estimated market value. In other words, the homeowner owes less than 50% of the home’s value to lenders.

The report is based on publicly recorded mortgage and deed of trust data collected and licensed nationwide along with an industry standard automated valuation model (AVM) updated monthly in the ATTOM Data Warehouse of more than 150 million U.S. properties.

More than 14 Million Properties Are “Equity Rich”

More than 14 million U.S. properties were “equity rich” in Q2 2017, representing almost 25% of all properties with a mortgage, the U.S. Home Equity & Underwater Report said.

This was an increase of more than 1.6 million properties from the same period last year,

Daren Blomquist, senior vice president at ATTOM Data Solutions, said in a press release: “An increasing number of U.S. homeowners are amassing impressive stockpiles of home equity wealth, enjoying the benefits of rapidly rising home prices while staying conservative when it comes to cashing out on their equity — homeowners are staying in their homes nearly twice as long before selling as they were prior to the Great Recession, and the volume of home equity lines of credit are running about one-third of the level they were at during the last housing boom.”

“However, this home equity wealth is unevenly distributed across different geographies, value ranges, occupancy statuses and lengths of ownership, with a disproportionately high equity rich share among high-end properties, investor-owned properties and properties owned for more than 20 years,” he said.

More than 5 Million Properties Are “Seriously Underwater”

The report also indicated that there are still a great number of homes—more than 5.4 million properties or 9.5% of all U.S. properties with a mortgage—are considered to be seriously underwater.  This means the combined loan amount secured by the property was at least 25% higher than the property’s estimated market value. Therefore, more is owed on the property than it’s worth.

Although high, this figure was actually down from 9.7% from the first quarter and by 11.9% in Q2 2016.

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