Owners’ net worth up in Q2

ATTOM has released its Q2 2022 US Home Equity & Underwater report, which shows that 48.1% of mortgaged residential properties in United States were considered equity-rich in the second quarter, meaning that the combined estimated amount of loan balances secured by these properties did not exceed 50% of their estimated market value.

The share of equity-rich mortgaged homes in Q2 2022 increased from 44.9% in Q1 2022 and 34.4% in Q2 2021. The latest increase, to nearly half of all mortgage payers, was marked the ninth consecutive quarterly rise in the share of homes in the equity-rich territory. The report found that at least half of all mortgage payers in 18 states were stock-rich in the second quarter, up from just three states a year earlier.

The report also shows that only 2.9% of mortgaged homes or one in 34 were considered seriously under water in the second quarter of 2022, with a combined estimated balance of loans secured by the property of at least 25% more than the estimated market value of the property. That was down from 3.2% of all US homes with a mortgage in the previous quarter and 4.1% or a 24 properties one year earlier.

“After 124 straight months of rising home prices, it’s no surprise that the percentage of equity-rich homes is the highest we’ve ever seen, and that the percentage of seriously underwater loans is the highest. low,” said Rick Sharga, Executive VP of Market Intelligence at ATTOM. “As home price appreciation appears to be slowing due to rising mortgage interest rates, it seems likely that homeowners will continue to rely on the record amount of equity they have available for the rest of 2022.”

Across the country, 49 states saw stock-rich levels rise from the first quarter of 2022 to the second quarter of 2022, while seriously underwater percentages fell in 46 states. Year-over-year, stock-rich levels rose in all 50 states and seriously-underwater portions fell in 46 states.

The equity scenario continued to improve in the second quarter for homeowners in the United States, mainly because home values ​​continued to soar. After a stable first quarter, the median price of single-family homes rose another 9% per quarter and 15% per year in the spring of this year to reach a new high of $346,000. For homeowners who had to keep up with their mortgage payments, this meant a widening gap between what they owed and what their home was worth, increasing the value of homes in equity-rich status.

Additionally, down payments to recent buyers have increased from approximately 5% to 7% over the past two years, allowing new owners to start out with more equity.

In the second quarter of 2022, stocks continued their relentless rise despite significant economic uncertainties related to the doubling of mortgage rates this year, inflation that has reached 40-year highs, rising fuel costs and d other problems. While the odds of even greater improvement remain uncertain, there are few immediate signs that equity gains will level off, especially as homebuyers continue to search for a historically tight supply of properties for sale.

Share of equity-rich mortgages growing the most in the South

Seven of the 10 states where the share of equity-rich mortgage homes rose the most in the first to second quarters of 2022 were in the southern region of the United States. Wyomingwhere the share of mortgaged homes considered equity rich rose from 26.1% in the first quarter to 33.9% in the second quarter. Maine followed, (from 48.5% to 56.3%), followed by Florida (up from 53.6% to 60.4%), Mississippi (up from 23.5% to 29.1%), and Caroline from the south (from 41.2% to 46.5%).

The states where the equity-rich share of mortgage homes fell, or grew the least, from the first to second quarters of this year were New Jersey (down from 38.6% to 37.9%), Utah (up from 63.6% to 64.3%), Idaho (up from 68.8% to 69.5%), North Dakota (up from 28.6% to 29.5%), and West Virginia (up from 26.9% to 28.4%).

The largest declines in seriously underwater properties have spread across the Northeast, South and Midwest

The states with the largest declines in the percentage of mortgaged homes considered seriously underwater from the first quarter of 2022 to the second quarter of 2022 were spread across the northeast, south and midwest. They were led by Mississippi (share of seriously underwater mortgaged homes down from 17% to 8.1%), Wyoming (down 10% to 7%), Missouri (down from 6.6% to 5.2%), Maine (down from 3.1% to 2.2%), and Connecticut (down 4% to 3.3%).

The only states where the percentage of severely underwater homes increased from the first to the second quarter of this year were Montana (up from 3% to 3.9%), New Jersey (up from 2.9% to 3%) and New York (up from 2.7% to 2.8%).

Major capital-rich counties located in the northeast, south, and west

Among 1,624 counties that had at least 2,500 housing units with mortgages in the second quarter of 2022, 49 of the 50 most capital-rich locations were in the northeast, south and west.

The counties with the highest share of stock-rich properties were:

  • Dukes County (Martha’s Vineyard), Massachusetts (83.2% equity rich)
  • County of Chittenden (Burlington), Vermont (82.3%)
  • Gillespie County, Texas (West of Austin) (79.4%)
  • Nantucket County, Massachusetts (78.6%)
  • Travis County (Austin), Texas (78.6%)

The counties with the smallest share of equity-rich homes in the second quarter of 2022 were:

  • Geary County (Junction town), Kansas (stock-rich 7%)
  • Vernon Parish, Louisiana (northwest of Lafayette) (9.7%)
  • Cumberland County (Fayetteville), North Carolina (12%)
  • Acadia Parish, Louisiana (outside Lafayette) (13.2%)
  • Greenup County, Kentucky (14%)

At least half of all properties are considered equity-rich in nearly 40% of postcodes

Of the 8,708 U.S. ZIP codes that had at least 2,000 residential properties with mortgages in the second quarter of 2022, there were 3,889 (37%) where at least half of mortgaged properties were equity-rich.

Forty-eight of the top 50 were in California, Florida, Massachusetts and Texaswith five of the top 10 in Austin, Texas. They were headed by postcodes 78617 in Del Valle, TX (86.4% of mortgaged properties were equity rich); 78739 in Austin, TX (85.7%); 34108 in Naples, Florida (85.1%); 02539 in Edgartown, MA (85%), and 78733 in Austin, TX (84.8%).

The South and Midwest still hold the largest shares of seriously underwater properties

Nine of the 10 states with the highest shares of seriously underwater mortgages in the second quarter of 2022 were in the South and Midwest. The top five were:

  1. Louisiana (11% seriously underwater)
  2. Mississippi (8.1%)
  3. Wyoming (seven%)
  4. Iowa (6.8%)
  5. Illinois (6.5%)

The smallest shares were in:

  1. Vermont (1% seriously underwater)
  2. California (1%)
  3. Washington (1%)
  4. Rhode Island (1.1%)
  5. Florida (1.2%)

The share of mortgages that were seriously underwater nationally in the second quarter of 2022 declined from the first quarter of 2022 in 101 or 95% of 107 metropolitan areas with enough data to analyze. Submarine fares have seriously decreased year over year in 102 of these 107 metros.

More than 25% of residential properties seriously underwater in just 33 ZIP codes

Of the 8,708 U.S. ZIP codes that had at least 2,000 homes with mortgages in the second quarter of 2022, there were just 33 locations where more than 25% of mortgaged properties were severely underwater. Of these, 14 were in Cleveland, Ohio; Detroit, Michigan and Philadelphia, Pennsylvania.

The top five zip codes with the largest shares of seriously underwater properties in the second quarter of 2022 were 46408 in Gary, Indiana (47.7% of mortgaged homes were severely underwater); 44108 in Cleveland, Ohio (46.6%); 66441 in Junction City, Kansas (44.9%); 10570 in Pleasantville, New York (44.8%), and 44,112 in Cleveland, Ohio (42.9%).

Over 90% of homeowners facing foreclosure have at least some net worth

Only about 214,800 homeowners faced possible foreclosure in the second quarter of 2022, or just four-tenths of one percent of the 58.2 million outstanding mortgages in the United States. houses.

“The fact that more than 90% of foreclosure homeowners have positive equity is good news for borrowers who find themselves in financial difficulty,” Sharga said. “These owners have the opportunity to leverage this equity to obtain short-term financing to resolve their defaults or to sell their properties for a profit and avoid a foreclosure auction.”

States with the highest percentages of homeowners facing foreclosure with equity in their properties in the second quarter of 2022 included:

  • New Hampshire (99% with equity)
  • Oregon (99%)
  • Utah (99%)
  • Colorado (99%)
  • Nevada (99%)

States with the lowest percentages included:

  • Louisiana (87% with equity)
  • Mississippi (89%)
  • Kansas (91%)
  • Illinois (92%)
  • Maryland (92%)

To read the full report, including more data and methodologies, click here.

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