The pandemic brought historically low inventory and sky-high home prices, but it also brought good news for homeowners, making them equity rich, as many owe far less than what their homes are worth.
A recent report from ATTOM Data Solutions found 39.5% of homes with mortgages in the U.S. were equity rich in the third quarter. That’s up from 28.3% of homes last year.
Today’s homeowners are not only in a position where they could sell their homes for twice what they owe, many are putting down more money, helping them build equity from the get-go.
“There is no doubt that homeowners continue benefiting big-time from the relentless home price increases we are seeing around the country,” Todd Teta, chief product officer of ATTOM said in a press release.
According to the report, equity-rich levels increased from the second quarter in 46 states, including Washington, D.C., while “seriously underwater” percentages dropped in 39 states. Only 3.4% of mortgaged homes were considered seriously underwater, down from 4.1% in the second quarter and 6% from a year ago.
Despite signs of the market slowing down, home prices continue to rise, and that’s good news for homeowners.
“Homeowners across most of the United States could sit back with a smile yet again in the third quarter and watch their balance sheets grow, as soaring home prices pushed their equity levels ever higher,” Teta said. “Amid the best gains in two years, nearly four of every 10 owners found themselves in equity-rich territory.”