1 in 4 properties considered equity rich
Approximately one in four of the 54.7 million mortgaged homes in the United States was considered equity rich in the first quarter of 2020, according to new numbers from ATTOM Data Solutions.
Equity rich refers to when the amount owed on a property is 50 percent or less of the property’s value.
Conversely, just one in 15 homes was considered seriously underwater.
Todd Teta, chief product officer with ATTOM, said while homeowners were in a strong position at the beginning of the year, the coronavirus could potentially affect their standing as time goes on.
“In the latest marker of the ongoing housing market boom, mortgage payers were four times as likely to have homes worth considerably more than what they owed on their loans than considerably less,” Teta said.
“But as with other rosy first-quarter reports, this one needs to be taken in the context of the looming impact of the coronavirus pandemic. With the potential for home values to fall, there is a significant chance that equity levels could drop over the coming months while underwater levels rise.”
Still, the combination of low for-sale inventory and pent-up buyer demand suggests home prices will remain firm and any declines will be moderate.
In the event that value declines more than “moderate”, what are your plans? I would love to hear your thoughts below!
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