The constant increase in home prices over the last few years has continued to provide more financial benefit to owning a home.
According to a new report from ATTOM Data Solutions, more than a third of homeowners with a mortgage had more than 50% in equity during the second quarter of this year.
The report showed that 34.4% of residential properties with a mortgage were considered to be “equity-rich” in the second quarter, meaning the remaining loan amount was no more than 50% of the home’s estimated market value.
That percentage of equity-rich properties is up 31.2% in the first quarter and up from 27.5% in the second quarter of 2020.
According to ATTOM’s report, the equity increases came as median home prices rose by 11% during the months of April, May, and June. “Those ongoing price runups have boosted equity because the increases have widened the gap between what homeowners owe on their mortgages and the value of their properties,” ATTOM said in its report.
Regionally, nine of the 10 states that saw the biggest equity gains in the second quarter were in the West and Northeast.
According to the report, seven of the top eight states with the highest levels of equity-rich homes in the second quarter were in the West, led by Idaho (54.2%), California (53.8%), Washington (49.4%) and Utah (45.5%).
"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,” said Todd Teta, chief product officer with ATTOM.
“Instead of the virus pandemic harming homeowners, it's helped create conditions that have boosted the balance sheets of households all across the country," Teta added.
"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,” Teta concluded. “We'll keep watching those closely, though for now, there are few assets that keep on giving so much as homeownership."