The recent surge in home values has been a boon for homeowner equity, despite being a hurdle for prospective buyers. According to ATTOM Data Solutions, 49.2% of mortgaged homes in the U.S. were considered "equity-rich" in the second quarter of 2024, meaning the loan balance was less than half of the home's estimated market value. This marks a 3.4 percentage point increase from the first quarter, ending a three-quarter trend of declines.
Moreover, the proportion of homes classified as "seriously underwater" — where the mortgage balance exceeds 25% of the property’s value — dropped to 2.4%, the lowest level observed since at least 2019. ATTOM's CEO, Rob Barber, attributed this positive shift to rising home prices bolstering equity, particularly in the more affordable markets of the South and Midwest.
States like Kentucky, Illinois, Missouri, Oklahoma, and Alabama saw the largest quarterly gains in equity-rich homes, while states such as Louisiana and Mississippi still had notable shares of seriously underwater properties. Meanwhile, Vermont, Maine, New Hampshire, Montana, and Rhode Island led the nation with the highest shares of equity-rich homes.
These trends highlight the ongoing impact of the housing market boom, with limited home supply and strong buyer demand potentially driving further equity growth in the coming months.
