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Home Equity At Historic Levels

The value of homeowner equity has hit historic levels.

Almost 14.5 million properties were equity rich in the third quarter, an increase of 433,000 compared with the same period a year ago, the highest the statistic has been since the data first began being collected in the fourth quarter of 2013, according to the Q3 2018 U.S. Home Equity & Underwater Report from Attom Data Solutions.

A property is considered equity rich when the combined estimated amount of loans secured by the property was 50 percent, or less of the estimated market value of the property.

The 14.5 million equity rich properties in the third quarter represented 25.7 percent of all properties with a mortgage. That’s up from 24.9 percent in the previous quarter, though down from 26.4 percent in Q3 2017.

In addition, more than 4.9 million properties were considered seriously underwater. A property is seriously underwater when the combined estimated balance of loans secured by the property was at least 25 percent higher than the property’s estimated market value. They decreased to 8.8 percent share of seriously, down from 9.3 percent in the previous quarter, but an increase from 8.7 percent in in the same period a year earlier.

“As homeowners stay put longer, they continue to build more equity in their homes despite the recent slowing in rates of home price appreciation,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “West coast markets along with New York have the highest share of equity rich homeowners. Markets in the Mississippi Valley and Rust Belt continue to have stubbornly high rates of seriously underwater homeowners when it comes to home equity.”

Highest seriously Underwater States

States with the highest share of seriously underwater properties were Louisiana (21.3 percent); Mississippi (16.2 percent); Iowa (15.5 percent); Arkansas (15.3 percent); and Illinois (15.1 percent).

Among 98 metropolitan statistical areas analyzed in the report, those with the highest share of seriously underwater properties were Baton Rouge, Louisiana (20.7 percent); Youngstown, Ohio (18.7 percent); New Orleans (18.6 percent); Scranton, Pennsylvania (18.3 percent); and Toledo, Ohio (17.7 percent).

Underforming  Zip Codes

Among 7,290 zip codes with at least 2,500 properties with mortgages, there were 26 zip codes where more than half of all properties with a mortgage were seriously underwater, including zip codes in the Detroit, Milwaukee, Saint Louis, Atlantic City and Cleveland metropolitan statistical areas.

The top five zip codes with the highest share of seriously underwater properties were 08611 in Trenton, New Jersey (71.0 percent seriously underwater); 63137 in Saint Louis, Missouri (66.5 percent); 60426 in Harvey, Illinois (64.2 percent); 38106 in Memphis, Tennessee (60.7 percent); and 44105 in Cleveland, Ohio (59.2 percent).

Top Performing States, MSAs

States with the highest share of equity rich properties were California (42.5 percent); Hawaii (39.4 percent); Washington (35.3 percent); New York (34.9 percent); and Oregon (33.6 percent).

Among 98 metropolitan statistical areas analyzed in the report, those with the highest share of equity rich properties were San Jose (73.9 percent); San Francisco (59.8 percent); Los Angeles (47.6 percent); Seattle (41.2 percent); and Honolulu (40.8 percent).

Outperforming Zip Codes

Among 7,290 zip codes with at least 2,500 properties with mortgages, there were 417 zip codes where more than half of all properties with a mortgage were equity rich.

The top five zip codes with the highest share of equity rich properties were all in the California Bay area: 94087 in Sunnyvale (87.1 percent equity rich); 94085 in Sunnyvale (86.7 percent equity rich); 94086 in Sunnyvale (86.7 percent equity rich); 94063 in Redwood City (85.9 percent equity rich); and 95130 in San Jose (85.7 percent equity rich).

 

 

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