The financial benefits of owning a home continued to grow in the third quarter, as rising home prices boosted the equity that many homeowners hold in their homes.
According to a new report from ATTOM Data Solutions, nearly 40% (39.5%, to be exact) of homeowners with a mortgage had more than 50% in equity in their home during the third quarter of this year.
That’s an increase over the 34.4% of homeowners that 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.
According to the report, 46 states saw their “equity-rich levels” rise from the second quarter to the third quarter. Looking at the equity situation year-over-year, equity-rich levels rose in 49 states from last year to this year.
“Equity increases during the months running from July through September came as the median home price nationwide rose 4% quarterly and 16% year over year, to a new record of $310,500,” ATTOM noted in its report.
“Median vales rose up at least 10% annually in two-thirds of metro-areas around the country,” ATTOM continued. “Those ongoing price runups continued boosting equity because they widened gaps between what homeowners owed on their mortgages and the value of their properties.”
According to the report, eight of the top 10 states with the highest levels of equity-rich properties in the third quarter were in the Western part of the country, led by Idaho (65.1% of mortgaged homes were equity-rich), Utah (60.9%), Washington (56.2%) and Arizona (53.2%).
"Homeowners across most of the United States could sit back with a smile yet again in the third quarter and watch their balance sheets grow as soaring home prices pushed their equity levels ever higher,” said Todd Teta, chief product officer with ATTOM.
“Amid the best gains in two years, nearly four of every 10 owners found themselves in equity-rich territory," Teta continued.
"For sure, some uncertainty lies ahead as other key market barometers have been a bit shaky as of late. And the Coronavirus pandemic remains a threat,” Teta concluded. “But there is no doubt that homeowners continue benefitting big-time from the relentless home price increases we are seeing around the country."