The most recent edition ATTOM’s [1] U.S. Home Equity & Underwater Report [2] for the third quarter shows that 39.5% of mortgaged residential properties were considered “equity-rich” meaning that the remaining balance of a mortgage was no more than 50% of their estimated market value.
In the third quarter, the portion of mortgaged homes that were equity-rich rose to 39.5%, up from 34.4% in the second quarter and 28.3% year-over-year.
On the other hand, a meager amount of homes—3.4% or one in 29—had mortgages that were considered “seriously underwater.” This number was down from 4.1% in the second quarter and 6.0% from the previous year.
Across the country, 46 states including the District of Columbia saw equity-rich levels increase from the second quarter to the third quarter of 2021, while seriously underwater percentages decreased in 39 states,” the report said. “Year over year, equity-rich levels rose in 49 states including the District of Columbia, and seriously underwater portions dropped in 47 states including the District of Columbia.”
“The improvements at both ends of the equity scale represented some of the largest quarterly gains in two years and provided yet another sign of how strong the U.S. housing market remained in the third quarter, even as the broader economy only gradually recovered from damage resulting from the Coronavirus pandemic that hit early last year.”
Among all zip codes (8,657 zip codes in all) there are 1,948 areas where at least half the mortgaged properties within their bounds were equity-rich.
“Forty-five of the top 50 were in California, Texas, Massachusetts and Idaho, with 11 of the top 20 in Austin. TX. They were led by zip codes 78746 in Austin, Texas (80.5% of mortgaged properties were equity-rich); 94122 in San Francisco, California (80.1%); 78749 in Austin, Texas (79.7%); 94116 in San Francisco, California (79.4%) and 78733 in Austin, Texas (79.2%).
On a state level, nine of the 10 states with the highest shares of mortgages that were found to be seriously underwater in the third quarter of 2021 were in the South and Midwest, led by Mississippi (17.7% seriously underwater), Wyoming (11.5%), Louisiana (10.7%), Iowa (8.4%) and Illinois (7.6%). The smallest percentages were in the West, led by Washington (1.2 %), Utah (1.2%), Oregon (1.3%), Arizona (1.3%) and Nevada (1.4%).