Housing appreciation has grown over the last few months with the surging real estate market. Thirty percent—nearly one in three—of homes with a mortgage in the U.S. are now considered “equity-rich,” according to a new report from ATTOM Data Solutions, a real estate research firm.
A home being equity-rich means that the combined estimated amount of loans secured by the property is 50% or less of the estimated market value. In short, it means homeowners themselves have accumulated at least half of the equity in their homes.
ATTOM’s fourth-quarter 2020 U.S. Home Equity & Underwater Report shows that 17.8 million residential properties in the U.S. were considered equity-rich.
“The housing market kept booming despite damage caused by the virus pandemic to the broader economy—a surge that continued to boost the equity that most property owners have in their homes,” says Todd Teta, chief product officer with ATTOM Data Solutions. “As with many other housing-market metrics, the prospects for equity building even further in 2021 are wholly uncertain because of many questions surrounding the pandemic and the U.S. economy. But for now, homeowners are sitting pretty on a growing reserve of personal wealth.”
Comparing the fourth-quarter results with those of the third quarter, six of the 10 states with the largest gains in the share of equity-rich homes were in the West. In California, the percentage of mortgaged homes considered equity-rich grew to 46.1% in the fourth quarter (up from 39.7% in the third quarter). Other equity-rich states showing rapid growth are Idaho (up from 39.5% to 42.7%), Montana (up from 31.9% to 34.8%), Arizona (up from 29.4% to 32.3%), and Vermont (up from 45.1% to 47.8%).
Overall, the states with the highest levels of equity-rich properties in the fourth quarter were all in the Northeast and West, led by Vermont (47.8%), California (46.1%), Idaho (42.7%), Washington (41%), and Hawaii (40.4%).
Source: ATTOM Data Solutions
