Equity-rich properties rise as fewer go underwater
As more homeowners decide to age in place, the amount of equity-rich properties continues to rise, according to Attom Data Solutions.
Equity-rich homes — those with a loan-to-value ratio of 50% or lower — totaled nearly 14.6 million in the fourth quarter of 2018, up from 13.7 million the year prior and an edge up from 14.5 million the previous quarter.
"With homeowners staying put longer, homeownership equity will most likely continue to strengthen," Todd Teta, Attom's chief product officer, said in a press release. "Those that are seriously underwater may find themselves coming up for air as they continue to pay off excessive legacy mortgages or sell."
California and its perennially high-valued real estate led all states with a 43.6% share of equity-rich properties in the fourth quarter of 2018. Hawaii was second at 39.3% and New York was third at 34.2%.
On the other end of the spectrum, seriously underwater homes dropped off year-over-year. The fourth quarter of 2018 had 5 million properties, a total of 8.8% nationwide, with loan-to-value ratios of 125% or above. It fell from 5.03 million and 9.3% of all properties year-over-year.
The states with the highest share of seriously underwater properties were all in the Southeast. Louisiana at 20.7% was the highest share, followed by Mississippi at 16.9% and Arkansas at 15.9%.
"This report helps to showcase a story of the West Coast markets having the highest share of equity-rich homeowners versus the South and Midwest markets, who continue to have stubbornly high rates of seriously underwater homeowners," Teta said.