When you own a home, you build equity with every mortgage payment. As you pay off your mortgage, you own a larger percentage of your home and the eventual profit you’d make when selling it. You also build equity through home price increases. As the value of your home goes up, whatever amount you owe becomes a smaller share of its total value. That’s the financial benefit of homeownership. It’s also the reason ATTOM Data Solutions’ U.S. Home Equity & Underwater Report tracks what share of mortgaged properties can be considered “equity rich,” meaning the amount owed is less than half what the home is estimated to be worth. According to the second quarter results, 41.1 percent of residential properties across the country can be considered equity rich. That’s still a higher percentage than before the pandemic-era buyers’ boom but it is lower than it’s been. In fact, that’s down from 47.4 percent one year ago at the same time. Rob Barber, ATTOM’s CEO, says the trend is one worth watching. “The two measures of home equity strength, the rates of equity rich and seriously underwater homes, remain healthier than they were prior to 2020,” Barber said. “However, both have been moving in less favorable directions over the past year, suggesting a trend worth watching.” (source)
