Warning: Undefined variable $custom_content in /home4/comcompare/public_html/mortgagenews/wp-content/plugins/code-snippets/php/snippet-ops.php(582) : eval()'d code on line 10
Half of all U.S. mortgages are now considered equity-rich, according to a new report from real estate data curator ATTOM.
According to the US Home Equity and Underwater Q2 report, 48.1% of the nation’s mortgages were considered equity-rich in the second quarter of this year, meaning the combined estimated amount of loan balances purchased in those properties is gone.
Then 50% of their estimated market value. Data is collected on more than 155 million properties in the US.
The report provides counts of properties based on different home equity or loan-to-value (LTV) categories at the state, metro, county, and zip code levels, along with the percentage of total mortgaged properties represented in each home equity category.
“Equity-rich” properties are properties with a loan-to-value ratio of 50% or less, meaning the property owner has at least 50% equity, while “severely underwater” properties are those with no loan-to-value. a ratio of 125% or more. , meaning the owner owes at least 25% more than the property’s estimated market value.
The share of home equity mortgages increased in the second quarter from 44.9% in the first quarter and 34.4% in the second quarter.
The latest increase, which covers nearly half of all U.S. mortgage payers, marks the ninth quarterly increase in the share of row homes in the property-rich area.
The report found that at least half of all mortgage payers in 18 states were equity-rich in the 2nd quarter, compared with just three states a year ago.
Rick Sharga, executive vice president of market intelligence at ATTOM, said he was not surprised by the report’s results given the high growth in home prices.
He said: “After 124 consecutive months of rising house prices, it is no surprise that the percentage of homes with equity is the highest we have ever seen and the percentage of serious fraudulent loans is the lowest.
“While home price appreciation appears to be slowing due to higher mortgage interest rates, homeowners are likely to build a record amount of equity through the rest of 2022.”
The ATTOM report also revealed that only 2.9% of foreclosed homes, or one in 34, were considered seriously underwater in Q2, with the combined estimated balance of loans secured by the property at least 25% higher than the property’s estimated market value.
That’s down from 3.2% of all mortgages compared to the previous quarter and 4.1%, or one in 24 properties, a year ago.
In the US, every state but one saw an increase in equity-rich levels this year as home values continued to rise, while serious fraud rates fell in 46 states.
After a flat first quarter, the median single-family home price rose another 9% quarter-over-quarter and 15% year-over-year to a new high of $346,000 this spring.
The report says that for homeowners who keep up with their mortgage payments including many who don’t that means a wider gap between what they owe and what their homes are worth, driving up the number of home values in a state full of equity.
Equity continues to “relentlessly rise” despite a doubling of mortgage rates this year, inflation rising to a 40-year high, and rising fuel costs, among other things.
Despite the economic uncertainty, the report stressed that there was “little immediate sign that equity gains would level off”, particularly due to the “historically tight” supply of salable assets.
Broken down by region, seven of the 10 states where the share of equity-rich mortgages rose the most between Q1 and Q2 were in the South.
The biggest growth was in Wyoming, where the share of property-rich mortgages rose from 26.1% in Q1 to 33.9% in Q2, Maine, Florida, Mississippi, and South Carolina.
In contrast, the states where the share of wealthy mortgages decreased or increased the least during the same period were New Jersey (from 38.6% to 37.9%), Utah, Idaho, North Dakota, and West Virginia.
In addition, the largest declines in truly underwater properties spread across the Northeast, South, and Midwest, led by Mississippi (proportion of mortgaged homes seriously underwater from 17% to 8.1%), Wyoming, Missouri, Maine, and Connecticut.
The only states where the percentage of severely underwater homes increased from the first quarter to the second quarter were Montana (from 3% to 3.9%), New Jersey, and New York.
Importantly, over 90% of homeowners facing foreclosure have at least some equity.
Only about 214,800 homeowners faced possible foreclosure in Q2, just four-tenths of 1% of the 58.2 million outstanding mortgages in the US.
Of those facing foreclosure, approximately 195,400, or 91%, have built at least some equity in their homes.
Sharga said, “The fact that more than 90% of homeowners in foreclosure have positive equity is good news for borrowers who find themselves in financial trouble or selling their properties for a profit to avoid a foreclosure auction.
Reference Source: MPA
