Homeowner Equity Surges With Midwest, South Leading

ATTOM Data Solutions has published its U.S. Home Equity & Underwater Report, tracking changes in nationwide home equity levels during Q2 2024. The latest report comes with good news: Almost half (49.2%) of mortgaged residential properties in the U.S. were considered equity rich during the second quarter. This is up from the 45.8% in Q1. Moreover, only 2.4% of home mortgages were seriously underwater this quarter. Not only is that down from 2.7% in Q1, but it also marks the lowest level since 2019.

“Equity rich” is defined as a property with a loan no more than half of its estimated market value. Conversely, a property is considered “seriously underwater” if the loan amount is 125% or above the property’s value.

The report describes this turnaround as “one of the best gains (in equity) in the past five years.” A primary reason offered is that home prices are up nationally (the current national median is $365,000, as measured by ATTOM, 9% higher than in Q1 2024.) 

These findings track with a report from LendingTree that was published in May, which found that many U.S. homeowners are currently seeking high-equity home loans. 

“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 ATTOM CEO Rob Barber. “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.”

Regional breakdown

Quarter-over-quarter, equity-rich mortgages increased in 48 states during Q2 2024. Annually, equity-rich mortgages increased in 31 states.

The states with the biggest increases in homes considered “equity rich” were primarily Southern states:

1. Kentucky (28.7% to 37.4%)
2. Illinois (28.3% to 36.1%)
3. Missouri (38.3% to 45.5%)
4. Oklahoma (28.1% to 34.5%) 
5. Alabama (35.7% to 41.9%)

The states with the smallest increases in equity-rich homes were:

1. North Dakota (31.5% to 32%)
2. California (58.6% to 59.4%)
3. Louisiana (20.1% to 21%)

States with the largest declines in underwater mortgages were:

• Wyoming (8.8% to 2.5%)
• Kentucky (8.3% to 6.3%)
• Illinois (5.2% to 4%)
• Oklahoma (6.1% to 5%)
• Alabama (3.6% to 2.8%)

Only two states saw outright increases in the number of underwater mortgages during the second quarter: Utah (2.1% to 2.2%) and South Dakota (3% to 3.1%). The number of underwater mortgages was also unchanged in New Mexico (2.6%), Kansas (2.9%) and Idaho (2.4%)

Northeastern and Western states had the highest levels of equity-rich homeowners:

1. Vermont (83.5%)
2. Maine (61.5%)
3. New Hampshire (61.1%)
4. Montana (61.1%)
5. Rhode Island (60.2%)

Meanwhile, Midwestern and Southern states had the fewest equity-rich homes:

1. Louisiana (21%)
2. Alaska (31%)
3. North Dakota (32%)
4. West Virginia (33.6%)
5. Oklahoma (34.5%)

For the full report, click here.