One in three mortgaged homes (34.4 percent) were considered equity-rich in the second quarter, according to ATTOM’s second-quarter 2021 U.S. Home Equity & Underwater Report. That was up from 31.2 percent in the first quarter and 27.5 percent a year ago.
The report also indicated that just 4.1 percent of mortgaged homes, or one in 24, were considered seriously underwater in the second quarter. That was down from 5.2 percent in the first quarter and 6.2 percent a year ago.
Across the country, 48 states saw equity-rich levels increase and seriously underwater percentages decrease from the first to second quarter. Every state saw equity-rich levels rise and the seriously underwater portion drop compared with last year.
The improvements at both ends of the equity scale were the largest in two years and provided another sign the housing market has resisted damage to the broader economy brought about by the pandemic, according to ATTOM.
Median home prices rose 11 percent quarterly and 22 percent year-over-year between April and June of 2021. Median home values rose at least 15 percent annually in a majority of the metro-area markets around the country. Those increases boosted equity, widening the gap between what homeowners owe on their mortgages and the value of their properties.
“The huge home-price jumps over the past year that helped millions of sellers earn big profits also kicked in big-time during the second quarter for other owners who saw their typical equity improve more than at any time in the last two years. Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country,” ATTOM Chief Product Officer Todd Teta said in a release. “There are still a lot of questions hanging over the near future of the U.S. housing market, with some connected to how well the economy keeps recovering from the pandemic, and some not. We’ll keep watching those closely, though for now, there are few assets that keep on giving so much as homeownership.”
Nine of the 10 states with the biggest gains in the share of equity-rich homes from the first to second quarter were in the West and Northeast. States with the biggest increases included Arizona, where equity-rich homes rose from 16.3 percent in the first quarter to 39.7 percent in the second; Massachusetts (up from 25.3 percent to 41.7 percent); New Hampshire (up from 20.4 percent to 36.1 percent); Rhode Island (up from 21 percent to 36.4 percent) and Delaware (up from 10.5 percent to 25.2 percent).
States where the share of equity-rich homes decreased or went up the least were Maryland (down from 23.5 percent to 23.2 percent); West Virginia (remained at 19.8 percent); Nebraska (up from 27 percent to 27.1 percent); Alaska (up from 22.5 percent to 22.9 percent); and Montana (up from 40.4 percent to 40.8 percent).
Seven of the 10 states with the biggest quarterly declines in homes considered seriously underwater were in the South and West. They included Tennessee (down from 10.1 percent to 4.4 percent); Alabama (down from 12.1 percent to 6.6 percent); Delaware (down from 9.9 percent to 4.6 percent); Alaska (down from 7 percent to 3.1 percent); and Nebraska (down from 8.6 percent to 5 percent).
States where the percentage of seriously underwater homes rose or declined the least from the first to the second quarter were West Virginia (up from 10.3 percent to 11.7 percent); New Hampshire (up from 2.4 percent to 2.5 percent; Hawaii (down from 2.5 percent to 2.3 percent); New York (down from 3.3 percent to 3.1 percent), and Utah (down from 2.2 percent to 1.9 percent).
The West had far higher levels of equity-rich properties than other regions in the second quarter, led by Idaho (54.2 percent of mortgaged homes were equity-rich); California (53.8 percent); Vermont (53.3 percent); Washington (49.4 percent); and Utah (45.5 percent).
Fourteen of the 15 states with the lowest percentages of equity-rich properties were in the Midwest and South, led by Louisiana (17.1 percent); Illinois (18.4 percent); Oklahoma (19.6 percent); West Virginia (19.8 percent); and Alabama (21.2 percent).