The number of mortgaged residential properties in the U.S. that are considered “equity-rich” continued to drop in the third quarter, according to data released by California-based real estate analytics firm ATTOM. The company’s third quarter 2024 U.S. Home Equity & Underwater Report found that 48.3 percent of mortgaged homes had loan balances that were no more than half of their estimated market values — thus qualifying them as equity-rich.
That level was down from a recent peak of 49.2 percent hit in the second quarter of 2024. However, it was still up from 47.4 percent a year earlier and remained historically high, reflecting one of the enduring effects of a housing market boom around the nation that has lasted more than a decade.
Much the same pattern emerged during the third quarter for the portion of home mortgages that were seriously “underwater” — with a higher mortgage balance than the home’s worth. Just 2.5 percent of mortgaged homes fell into that category, with combined estimated balances of loans secured by properties that are at least 25 percent more than those properties’ estimated market values. That was slightly worse than the 2.4 percent recorded in the prior quarter and the same is in the third quarter of 2023.
“Homeowner equity typically mirrors home-price trends, and the third quarter of this year, followed that pattern. Equity remained elevated as the value of residential properties has surged consistently over the years. However, it held steady this quarter, reflecting the cooling of earlier sharp price increases,” said Rob Barber, CEO at ATTOM. “Despite the flat pattern, home equity keeps providing a significant boost to the economy in the form of financial leverage that tens of millions of households can use to finance major purchases or investments.”
Barber also said that “we can expect to see small movements up or down over the coming months as the housing market moves into its annual slow season.”
The latest equity pattern report comes as the market remains strong throughout most of the nation but also faces a mix of forces that could either keep it going upward or flatten it out, Barber said.
Equity-rich levels declined more often in western states, led by Utah (down, year over year, from 56.8 percent to 52.4 percent), Arizona (down from 54.3 percent to 50 percent), Colorado (down from 51.1 percent to 48 percent), Washington (down from 56.7 percent to 54.6 percent) and Oregon (down from 52.7 percent to 50.8 percent).