According to a new report from ATTOM Data, 47.2% of mortgaged residential properties in the United States were shown to be equity-rich during the first quarter of 2023, meaning that the combined amount of loan balances for a property is no more than 50% of estimated market value.
This information comes by way of ATTOM’s first quarter Home Equity & Underwater Report. Overall, the portion of mortgaged homes decreased a bit from the 48% reported during the fourth quarter of 2022 and marked the second straight quarterly decline following 10 quarters of consecutive gains. The report found that the portion of equity-rich mortgage-payers went down from the fourth quarter of 2022 to the first quarter of 2023 in 32 states around the U.S.
The small equity downturn indicates how a decline of home prices across the country has started to affect homeowners following a decade-long real estate boom. It comes as home-seller profits have slid to their lowest point in two years.
By the numbers, just 3% of mortgaged homes—or 1-in-33—were considered seriously underwater during the first quarter. The latest seriously underwater figure was virtually unchanged from 2.9 percent in the prior quarter and was still down from 3.2% in the first quarter of 2022.
"Homeowners across the U.S. continue to sit in a far better position than they were just a few years ago, with historically elevated levels of wealth built up in their properties. However, the recent downturn in the housing market is chipping away at the bounty they reaped from a decade of price surges," said Rob Barber, CEO for ATTOM. "Home equity has fallen modestly amid a larger slump in profits homeowners are getting when they sell. It's still too early to call this a long-term trend, and there are reasons to hope for a market turnaround this year. For now, though, various measures suggest that the best of the boom may be behind us."
According to ATTOM, about 238,000 homeowners were facing possible foreclosure during the first quarter, or 0.4%, of the 58.2 million outstanding mortgages in the country. Of those facing foreclosure, about 219,000, or 92% , had at least some equity built up in their homes.
Click here to view the report in its entirety.