Equity-Rich Portion of Mortgaged Homes Hits
Two-Year Low While Seriously Underwater Level Climbs; Total
Owner Equity Also Ticks Downward Again as Home Prices Dip
IRVINE,
Calif., May 9, 2024 /PRNewswire/ -- ATTOM, a
leading curator of land, property, and real estate data, today
released its first-quarter 2024 U.S. Home Equity &
Underwater Report, which shows that 45.8 percent of mortgaged
residential properties in the United
States were considered equity-rich in the first quarter,
meaning that the combined estimated amount of loan balances secured
by those properties was no more than half of their estimated market
values.
The portion of mortgaged homes that were equity-rich in the
first quarter of 2024 is down from 46.1 percent in the fourth
quarter of 2023, marking the third straight quarterly decline. The
latest figure also was down from 47.2 percent in the first quarter
of 2023, hitting the lowest point in two years.
At the same time, the report shows that the portion of mortgaged
homes that were seriously underwater in the U.S. rose slightly in
the first few months of 2024, from 2.6 percent to 2.7 percent of
all residential mortgages. Seriously underwater mortgages are those
with combined estimated balances of loans secured by properties
that are at least 25 percent more than those properties' estimated
market values.
"Homeowner balance sheets continue to benefit in a huge way from
the boom times in the form of elevated equity that can be used to
help finance all kinds of things, from home renovations to business
startups. Still, the windfalls are starting to erode bit by bit
amid mounting signs that the market is no longer so super-heated,"
said Rob Barber, CEO for ATTOM.
"It's too early to make any broad statements about the market
direction, especially coming off the typically slower Fall and
Winter months. But amid the recent trends, this year's Spring
buying season will be of heightened importance in telling us if
there is a new long-term market pattern developing."
The latest equity drop-offs emerged as the national median
single-family home and condo value slipped 4 percent over the
Winter and was up just a modest 3 percent year-over-year during the
first quarter. When prices flatten out or drop, equity usually
follows even as homeowners pay off mortgages. That's because equity
is based on mortgage debt as a portion of estimated property
values.
Heading into the Spring buying season, the market faces a mix of
forces that could drive it back up or hold it steady. Those forces
include a tight supply of homes for sale and a strong investment
market but also mortgage interest rates that have climbed back
above 7 percent for a 30-year loan on top of home prices that
remain a financial stretch for average wage earners.
Equity-rich share of mortgages declines quarterly in a
majority of U.S.
The portion of mortgages that were
equity-rich decreased in 26 of the 50 U.S. states from the fourth
quarter of 2023 to the first quarter of 2024, commonly by less than
two percentage points. Measured annually, equity-rich levels
dropped from the first quarter of 2023 to the same period this year
in 25 states.
The biggest quarterly declines came in the South regions, led by
Kentucky (portion of mortgages
homes considered equity-rich decreased from 35.4 percent in the
fourth quarter of 2023 to 28.7 percent in the first quarter of
2024), South Carolina (down from
42.4 percent to 40 percent), Georgia (down from 46 percent to 43.7
percent), Delaware (down from 39.4
percent to 37.2 percent) and Indiana (down from 43 percent to 40.9
percent).
At the other end of the scale, equity-rich levels rose in 23
states from the fourth quarter of 2023 to the first quarter of
2024, mostly by less than one percentage point. The largest
improvements were concentrated in the Midwest and West regions, led
by South Dakota (up from 49.8
percent to 51.5 percent), Hawaii
(up from 55 percent to 56.5 percent), Montana (up from 57.3 percent to 58.7
percent), North Dakota (up from
30.4 percent to 31.5 percent) and Mississippi (up from 37.3 percent to 38.3
percent).
Seriously underwater mortgage levels tick upward in most
states
The portion of mortgaged homes considered seriously
underwater rose slightly nationwide from one in 38 during the
fourth quarter of last year to one in 37 during the first quarter
of this year. The ratio went up in 37 states, mostly by less than
one percentage point.
The biggest increases were clustered in the South, which already
had some of the nation's highest levels of seriously underwater
mortgages. The largest quarterly increases were in Kentucky (share of mortgaged homes that were
seriously underwater up from 6.3 percent in the fourth quarter of
2023 to 8.3 percent in the first quarter of 2024), West Virginia (up from 4.4 percent to 5.4
percent), Oklahoma (up from 5.5
percent to 6.1 percent), Arkansas
(up from 5.2 percent to 5.7 percent) and Delaware (up from 2.3 percent to 2.7
percent).
On the flip side, states where the percentage of seriously
underwater homes decreased most from the fourth quarter of 2023 to
the first quarter of 2024 were Missouri (down from 5.6 percent to 4.5
percent), Mississippi (down from 8
percent to 7.1 percent), Arizona
(down from 1.9 percent to 1.6 percent), Hawaii (down from 1.7 percent to 1.6 percent)
and Tennessee (down from 2.9
percent to 2.8 percent).
Upscale markets in Northeast and West continue to have
highest levels of equity-rich homeowners
Nine of the 10
states with the highest levels of equity-rich mortgaged properties
around the U.S. during the first quarter of 2024 again were in the
Northeast or West regions. Those with the largest portions were
Vermont (82 percent of mortgaged
homes were equity-rich), Maine
(59.2 percent), Montana (58.7
percent), California (58.6
percent) and New Hampshire (57
percent).
Nine of the 10 states with the lowest percentages of equity-rich
properties during the first quarter of 2024 were again in the
Midwest or South. The smallest portions were in Louisiana (20.1 percent of mortgaged homes
were equity-rich), Oklahoma (28.1
percent), Illinois (28.3 percent),
Kentucky (28.7 percent) and
Alaska (29.5 percent).
Among 107 metropolitan statistical areas around the nation with
a population of at least 500,000, upscale markets where median home
values topped $400,000 dominated the
list of places with the highest portion of mortgaged properties
that were equity-rich during the first quarter. (See ATTOM's latest
Q1 2024 home sales report).
They were led by San Jose, CA
(69.3 percent equity-rich, with a first-quarter median home price
of $1.4 million); Miami, FL (64.5 percent, with a median price
of $440,000); Los Angeles, CA (64.3 percent, with a median
price of $900,000); San Diego, CA (64.2 percent, with a median
price of $835,000) and Portland, ME (63.2 percent, with a median
price of $470,000).
The leader in the Midwest continued to be Grand Rapids, MI (53 percent, with a median
price of $287,000).
The metro areas with the lowest percentages of equity-rich
properties in the first quarter of 2024 were mainly in low-priced
markets. The smallest levels were in Baton Rouge, LA (12.7 percent of mortgaged
homes were equity-rich, with a first-quarter median home price of
$212,533); Little Rock, AR (24 percent, with a median
price of $197,000); Virginia Beach, VA (26.2 percent, with a
median price of $305,000); and
Tulsa, OK (27.6 percent, with a
median price of $215,000).
The portion of mortgaged homes considered equity rich declined
from the fourth quarter of 2023 to the first quarter of 2024 in 63
of the 107 metro areas with sufficient data (59 percent) while the
portion decreased from the first quarter of 2023 to the same period
of 2024 in 70 percent.
Top equity-rich counties remain in Midwest, Northeast and
West
Among 1,743 counties that had at least 2,500 homes with
mortgages in the first quarter of 2024, the top 25 equity-rich
locations were in the Midwest, Northeast or West regions, with none
located in the South.
Counties with the highest share of equity-rich properties were
Chittenden County (Burlington), VT (88.6 percent equity rich);
Benzie County (Beulah), MI (86.6 percent); Addison County (Middlebury), VT (86.3 percent); Washington County (Montpelier), VT (85.3 percent) and
Manistee County, MI (85.2
percent).
Counties with populations of at least 500,000 and the highest
equity-rich levels were Santa Clara
County (San Jose), CA (70.2
percent equity-rich); San Mateo County,
CA (69.8 percent); Orange County,
CA (outside Los Angeles)
(68.1 percent); Palm Beach County
(West Palm Beach), FL (67.5
percent) and Miami-Dade County, FL
(67.5 percent).
Twenty-three of the 25 counties with the smallest share of
equity-rich homes in the first quarter of 2024 were in the South.
The lowest were in Campbell County
(Gillette), WY (3.9 percent
equity-rich); Vernon Parish
(Leesville), LA (7.9 percent);
Ascension Parish, LA (outside
Baton Rouge) (8 percent);
Jefferson County (Mount Vernon), IL (8.2 percent) and
Marshall County, WV (outside
Pittsburgh, PA (8.9 percent).
Counties with populations of at least 500,000 and the smallest
equity-rich portions were Baltimore
City/County, MD (25.4 percent equity-rich); Prince George's County, MD (outside
Washington, DC) (26.2 percent);
Cook County (Chicago), IL (26.5 percent); Jefferson County (Louisville), KY (26.7 percent) and
Anne Arundel County (Annapolis), MD (27.9 percent).
At least half of all mortgaged properties considered
equity-rich in more than one-third of zip codes
Among 9,101
U.S. zip codes that had at least 2,000 residential properties with
mortgages in the first quarter of 2024, there were 3,334 (37
percent) where at least half the mortgaged properties were
equity-rich.
Among the top 50 zip codes, 32 were in California or Florida. The largest shares were in zip codes
83340 in Ketchum, ID (86.4 percent
of mortgaged properties were equity-rich); 49855 in Marquette, MI (84.9 percent); 92657 in
Newport Coast, CA (84.8 percent);
93108 in Santa Barbara, CA (84.6
percent) and 94024 in Los Altos,
CA (84.2 percent).
Midwest and South have largest shares of seriously underwater
mortgages
The Midwest and South regions had nine of the top
10 states with the highest shares of mortgages that were seriously
underwater in the first quarter of this year. The top five were
Louisiana (11.3 percent seriously
underwater), Wyoming (8.8
percent), Kentucky (8.3 percent),
Mississippi (7.1 percent) and
Oklahoma (6.1 percent).
The smallest shares were in Vermont (0.8 percent seriously underwater),
Rhode Island (1.1 percent),
New Hampshire (1.1 percent),
California (1.2 percent) and
Massachusetts (1.3 percent).
Among 107 metropolitan statistical areas with a population
greater than 500,000, those with the largest shares of mortgages
that were seriously underwater in the first quarter of 2024 were
Baton Rouge, LA (13.4 percent);
New Orleans, LA (7.3 percent);
Jackson, MS (6.5 percent);
Little Rock, AR (6 percent) and
Syracuse, NY (5.6 percent).
More than 20 percent of residential mortgages seriously
underwater in just 40 zip codes
Among 9,101 U.S. zip codes
that had at least 2,000 homes with mortgages in the first quarter
of 2024, there were only 40 locations where more than 20 percent of
mortgaged properties were seriously underwater.
The top five zip codes with the largest shares of seriously
underwater properties in the first quarter of 2024 were 82716 in
Gillette, WY (87 percent of
mortgaged homes were seriously underwater); 82718 in Gillette, WY (79.2 percent); 62864 in
Mount Vernon, IL (55 percent);
42728 in Columbia, KY (49.3
percent) and 42445 in Princeton,
KY (42.2 percent).
Report methodology
The ATTOM U.S. Home Equity
& Underwater report provides counts of properties based on
several categories of equity — or loan to value (LTV) — at the
state, metro, county and zip code level, along with the percentage
of total properties with a mortgage that each equity category
represents. The equity/LTV is calculated based on record-level loan
model estimating position and amount of loans secured by a property
and a record-level automated valuation model (AVM) derived from
publicly recorded mortgage and deed of trust data collected and
licensed by ATTOM nationwide for more than 155 million U.S.
properties. The ATTOM Home Equity and Underwater report has been
updated and modified to better reflect a housing market focused on
the traditional home buying process. ATTOM found that markets
where investors were more prominent, they would offset the loan to
value ratio due to sales involving multiple properties with a
single jumbo loan encompassing all of the properties. Therefore,
going forward such activity is now excluded from the reports in
order to provide traditional consumer home purchase and loan
activity.
Definitions
Seriously underwater: Loan to value
ratio of 125 percent or above, meaning the property owner owed at
least 25 percent more than the estimated market value of the
property.
Equity-rich: Loan to value ratio of 50 percent or lower,
meaning the property owner had at least 50 percent
equity.
About ATTOM
ATTOM provides premium property data to power
products that improve transparency, innovation, efficiency, and
disruption in a data-driven economy. ATTOM multi-sources property
tax, deed, mortgage, foreclosure, environmental risk, natural
hazard, and neighborhood data for more than 155 million
U.S. residential and commercial properties covering 99 percent of
the nation's population. A rigorous data management process
involving more than 20 steps validates, standardizes, and enhances
the real estate data collected by ATTOM, assigning each
property record with a persistent, unique ID — the ATTOM ID. The
30TB ATTOM Data Warehouse fuels innovation in many industries
including mortgage, real estate, insurance, marketing, government
and more through flexible data delivery solutions that
include ATTOM Cloud, bulk file licenses, property
data APIs, real estate market trends, property
navigator and more. Also, introducing our newest innovative
solution, making property data more readily accessible and
optimized for AI applications– AI-Ready Solutions.
Media Contact:
Megan
Hunt
megan.hunt@attomdata.com
Data and Report
Licensing:
datareports@attomdata.com
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