The portion of mortgaged homes that are equity-rich fell in the fourth quarter of 2022 for the first time since 2020, according to the ATTOM Data Solutions Home Equity & Underwater Report.
- Q-O-Q: Mortgaged residential properties in the United States considered equity-rich fell half a point to 48.0% in the fourth quarter of 2022.
- Y-O-Y: Properties in the United States considered equity-rich were up 7.1 percentage points when compared to the fourth quarter of 2021.
Streak Ends. While the equity-rich levels nationwide remain nearly double what it was three years ago, the drop-off in the last three months of 2022 reversed a string of 10 straight quarterly gains.
Some Equity. 94.1% of homeowners paying off mortgages had at least some equity built up in their properties in Q4, this is down slightly from 94.3% in Q3 but up from 93.5% in the fourth quarter of 2022.
Northeast Equity. The top counties with the highest share of equity-rich properties were almost all in the Northeast. Chittenden County, VT took the top spot with 86.5% of mortgage properties being equity-rich followed by Dukes County, MA (84.1%), San Miguel County, CO (80.4%); Nantucket County, MA (79.8%) and Washington County, VT (77.1%).
- Unfortunately, the counties with the smallest share of equity-rich homes were all in the south. Geary County, KS took the top spot with just 7.0% of mortgaged properties being equity-rich followed by Boone County, MO (8.1%); Greenup County, KY (10.7%).
Most Improved. Southern states were three of the top five states for improved levels of equity rich properties in the nation. The largest increase was in Montana thanks to a 6.5 percentage point increase to 58% and Delaware took the 3rd spot with a 1.8 percentage point increase. The South made up of the rest with Kansas up 3 percentage points to 37% followed by Mississippi (+1.7pp) and Arkansas (+1.4pp).
- Not surprisingly the states with the biggest drop in equity-rich properties were housing markets that were on fire during the boom. Idaho saw the biggest drop with a 4.2 percentage points drop followed by Arizona and Nevada both following 3.5 percentage points.
BOTTOM LINE: Home prices stagnating in some markets and falling in others led to a drop in equity nationwide. However, with almost 50% of homeowners sitting on 50% or more of equity and over 94% of homeowners having some equity we are as far from a 2008 housing crash as we can get.