Today, ATTOM released its third quarter 2024 U.S. Home Equity & Underwater Report, showing that nearly 50% of mortgaged residential properties are considered equity-rich, meaning the home’s remaining loan balance equals just half of the property’s estimated market value.
"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 ATTOM CEO Rob Barber.
The level of equity-rich homes fell slightly from its recent peak of 49.2% in the previous quarter to 48.3% in the third quarter of 2024. Still, properties across the country are accruing more equity, up from 47.4% last year, and have remained historically high throughout the year.
A similar trend emerged for the portion of residential mortgages that were seriously underwater during the third quarter this year. Only 2.5% of mortgaged homes fell into that category, with loan balances that are 25% more than those properties' estimated market values. That’s slightly worse than the previous quarter, which had 2.4% of homes seriously underwater, but unchanged from last year.
“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 added. “We can expect to see small movements up or down over the coming months as the housing market moves into its annual slow season.”
Equity-Rich States
Although home equity decreased in 28 of the 50 U.S. states from the second quarter to the third quarter of 2024, typically by less than two percentage points, it continued to be up annually in 37 states.
Annual increases in home equity were generally concentrated in the Midwest and Northeast regions of the country. Vermont had the largest increase of mortgaged homes considered equity-rich, rising from 79.8% in the third quarter of 2023 to 86.4% in the third quarter of 2024. Second was West Virginia, up from 30.5% to 37%. In third, Connecticut was up from 41.5% percent to 47.7%, followed by New Jersey up from 45.9% to 52%, and Rhode Island, up from 54.7% to 60.6%.
Seriously Underwater States
The portion of mortgaged homes considered seriously underwater across the U.S. barely changed at one in 40. That’s up slightly from one in 42 during the second quarter of 2024, same as a year earlier, but well below the ratio of one in 15 recorded in 2020.
The largest annual increases in the percentage of seriously underwater homes during the third quarter of 2024 were in Kansas (up from 2.6% to 4.4%), Utah (up from 1.8% to 2.4%), South Dakota (up from 2.6% to 3.1%), Missouri (up from 3.9% to 4.3%) and Colorado (up from 1.7% to 2%).
