2022 Homeowner Equity Rises In All U.S. States, Save For NJ

NEW JERSEY - New data from real estate insights analyzer ATTOM Data Solutions has revealed that, from the first quarter of 2022 to the second, the percentage of mortgaged residential properties considered "equity-rich” increased across the U.S., save for one state.

According to The ATTOM U.S. Home Equity & Underwater report released Thursday, the lonely outlier is New Jersey, which saw its ratio fall from 38.6 to 37.9 percent.

ATTOM defines “equity-rich” as properties with estimated loan balances that are no more than 50 percent of their market value.

In the U.S. on average, the percentage of mortgaged homes that were deemed “equity-rich” in the second quarter of 2022 increased from 44.9 percent in the first quarter of 2022 and from 34.4 percent in the second quarter of 2021, ATTOM reported.

“After 124 consecutive months of home price increases, it’s no surprise that the percentage of equity rich homes is the highest we’ve ever seen, and that the percentage of seriously underwater loans is the lowest,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “While home price appreciation appears to be slowing down due to higher interest rates on mortgage loans, it seems likely that homeowners will continue to build on the record amount of equity they have for the rest of 2022.”

The latest increase impacted nearly half of all mortgage payers and marked the ninth straight quarterly rise in the portion of homes in equity-rich designation, the curator added. In fact, the report found that at least half of all mortgage payers in 18 states were deemed “equity-rich” in the second quarter of 2022, compared to only three states one year prior.

2.9 percent of mortgages (1 in 34) were also considered “seriously underwater” in the second quarter of 2022, which constitutes having a combined estimated balance of loans secured by the property of at least 25 percent more than the property’s estimated market value, per ATTOM. That’s down from 3.2 percent of all U.S. homes with a mortgage in the prior quarter and 4.1 percent, or one 24 properties, one year prior.

New Jersey, however, served as one of three states where the percentage of seriously underwater homes increased from the first quarter to the second quarter of this year, up from 2.9 to 3 percent. In fact, more than 25 percent of mortgaged properties in the Philadelphia area were reported as seriously underwater, ATTOM said. The other states listed were Montana (up from 3 to 3.9 percent) and New York (up from 2.7 to 2.8 percent).

In contrast, ATTOM says it is observing a current wave of migration from high-cost areas in the U.S. to the south and southeast as equity-rich mortgages rise in the area. The south and Midwest also saw most of the largest declines in seriously underwater properties in states like Mississippi (share of mortgaged homes seriously underwater down from 17 to 8.1 percent) and Missouri (down from 6.6 to 5.2 percent).

The ATTOM U.S. Home Equity & Underwater report analyzed properties based on several metrics of equity — or loan to value (LTV) — at the state, metro, county and zip code level, as well as the percentage of total properties with a mortgage that each equity category represents. To see the full methodology and report, click here.