Good News: US Homeowners Far More Likely to be Equity-Rich Than Underwater

Homeowners in the US are currently estimated to be 400% more likely to be equity-rich than underwater.

Findings From the 4th Quarter Home Equity & Underwater Report 

ATTOM Data Solutions’ 4th quarter US Home Equity & Underwater Report showed that only 1 in 16 homes in the US were considered “underwater”. The report indicates approximately 14.5 million residential properties in the US were considered “equity-rich” in the 4th quarter. This number represents 26.7% of the 54.5 million mortgaged homes in the United States. For a home to be considered “equity-rich”, the combined estimated amounts of loans on the property must be 50% or less of the property’s market value. 

On the flipside, homes that are considered “underwater”, meaning that the combined loans on that home are worth at least 25% more than the property’s market value, account for only 6.4% of all US properties with a mortgage. 

Todd Teta, chief product officer of ATTOM Data Solutions, noted that, 

Homeownership continued boosting household balance sheets across the United States in the fourth quarter of 2019, as people paying off mortgages were much more likely to be in equity-rich territory than seriously underwater.“That marked yet another sign of how much the country has benefited from an eight-year housing-market boom. Some big gaps in equity levels persist between regions and market segments. But as home values keep climbing, financial resources keep building for homeowners, which provides them with leverage to make home repairs, help their children through college or take on other major expenses.

Highest Equity-Rich Shares Found in the Northeast and Western United States

The good news extends to New Jersey as well. The top 10 states with the highest record shares of equity-rich properties were found exclusively in the northeast and western parts of the United States. States with the lowest percentages of equity-rich properties were located primarily in the midwest and southeast regions. 

Reporting Methods for ATTOM Data Solutions

Positive news when it comes to the economy and housing market is always welcome. However, it can be difficult to fully trust. You can feel confident in the findings of ATTOM Data Solutions as their report provides counts of properties based on several categories of equity, otherwise known as loan to value (LTV). Equity is calculated based on a record-level loan model that estimated both position and the amount of loans secured by a property. This data is collected from more than 155 million US properties in total.