ATTOM today released its second quarter 2024 U.S. Home Equity & Underwater Report, which shows that 49.2% of mortgaged residential properties in the United States were considered equity-rich in the second quarter.
In other words, the combined estimated amount of loan balances secured by those properties was no more than half of those properties' estimated market values.
The second quarter's figure was up from 45.8% in the first quarter of 2024, matching a high point reached in the spring of last year. The increase reversed a series of three straight quarterly declines and marked one of the best gains in the past five years.
While equity-rich levels improved, the report also reveals that the portion of home mortgages that were seriously underwater in the U.S. declined to 2.4% during the second quarter, or just one in 42. That was down from 2.7% in the prior quarter to the lowest level since at least 2019. Per ATTOM, underwater mortgages are those with combined estimated balances of loans secured by properties that are at least 25% more than those properties' estimated market values.
The second-quarter equity gains came as home prices spiked during the 2024 spring buying season, with the median national price shooting up 9% quarterly to $365,000.
"Homeowner wealth took a notable turn for the better during the second quarter as equity levels piggybacked on some of the biggest home-price spikes we've seen in recent years," said Rob Barber, CEO of ATTOM. "After a period where equity seemed stagnant or even declining, this brought another boost of good news for homeowners from the enduring housing market boom. Supplies of homes for sale remain limited these days and buyer demand is typically elevated during the Summertime. So, it should be no surprise if home values go even higher and take equity along for the ride."
The report noted that the portion of mortgages that were equity-rich increased in 48 of the 50 U.S. states from the first quarter of 2024 to the second quarter of 2024, commonly by more than two percentage points. Measured annually, equity-rich levels were up in 31 states.
The biggest quarterly increases came in lower-priced markets, mainly across the South and Midwest regions, led by Kentucky (where the portion of mortgaged homes considered equity-rich increased from 28.7% in the first quarter of 2024 to 37.4% in the second quarter of 2024), Illinois (up from 28.3% to 36.1%), and Missouri (up from 38.3% to 45.5%).
At the other end of the scale, equity-rich levels remained the same in two states, staying at 54% in Utah and 51.5% in South Dakota. The smallest increases were in North Dakota (up from 31.5% to 32%), California (up from 58.6% to 59.4%), and Louisiana (up from 20.1% to 21%).
ATTOM also recorded that the largest levels of equity-rich homeowners are still in higher-priced markets of the Northeast and West. The 10 states with the highest levels of equity-rich mortgaged properties around the U.S. during the second quarter of 2024 again were in the Northeast or West regions. Those with the largest portions were Vermont, where 83.5% of mortgaged homes are equity-rich, Maine (61.5%), and New Hampshire (61.1%).
More details from the report can be found here.
