Homeowner Equity Keeps Rising

ATTOM, Irvine, Calif., released its third-quarter 2022 U.S. Home Equity & Underwater Report, showing 48.5 percent of mortgaged residential properties in the United States were considered equity-rich in the third quarter, up from 48.1 percent in the second quarter and 39.5 percent a year ago.

The increase, while below other gains in recent years, still marked the 10th straight quarterly rise, and resulted in virtually half of all mortgage payers landing in equity-rich territory. The report found that at least half of all mortgage-payers in 20 states were equity-rich in the third quarter, compared to only seven states a year earlier.

“Even though home price appreciation has slowed down dramatically in recent months, homeowners have continued to build equity,” said Rick Sharga, executive vice president of market intelligence with ATTOM. “And it appears that many of those homeowners have decided to stay where they are rather than purchase a new home, and are beginning to tap into that equity, as the number of home equity lines of credit issued in the second quarter of 2022 rose by 43 percent from the prior year.”

The report also shows that just 2.9 percent of mortgaged homes, or one in 35, were considered seriously underwater in the third quarter, with a combined estimated balance of loans secured by the property of at least 25 percent more than the property’s estimated market value. The latest seriously underwater figure was the same as the 2.9 percent recorded in the prior quarter, but down from 3.4 percent, or one in 29 properties, a year ago.

Overall, the report said, 94.3 homeowners paying off mortgages had at least some equity built up in the third quarter, compared to 92.9 percent a year earlier and 87.7 percent in 2020. That level rises further when accounting for homeowners who have paid off their mortgages.