ATTOM Data Solutions recently released its third-quarter 2020 U.S. Home Equity & Underwater Report, which shows that 16.7 million residential properties in the U.S. were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.
In the third quarter of 2020, equity-rich properties made up 28.3 percent, or about one in four, of the 58.9 million mortgaged homes in the U.S. That level is up from 27.5 percent in the second quarter of 2020, 26.5 percent in the first quarter of 2020 and 26.7 percent in the third quarter of 2019, despite the economic damage caused by the ongoing pandemic.
According to the report, only 3.5 million (or one in 17) mortgaged homes in Q3 were considered seriously underwater, with a combined estimated balance of loans secured by the property of at least 25 percent more than the property’s estimated market value. That’s 6 percent of all U.S. properties with a mortgage, down from 6.2 percent last quarter, 6.6 percent in the first quarter of 2020 and 6.5 percent a year ago.
Of the 50 states, 49 showed a quarterly increase in the percentage of homes considered equity-rich, while only seven showed increases in the percentage that were seriously underwater. Six of the seven rose by less than one percentage point.
“Homeowner equity in the third quarter added another pebble to the pile of markers showing that the U.S. housing market continues to defy the broad downturn in the economy this year. Home prices keep rising, boosting the balance sheets of homeowners throughout most of the country,” said Todd Teta, chief product officer with ATTOM Data Solutions. “With the foundation under the housing market still shaky as the coronavirus remains a threat, we will continue to monitor closely the various metrics, including equity. But as it’s been throughout the pandemic, the market is strong and homeowners remain in a position to benefit.”
To access the entire report, click here.