The first quarter ended with 45.8% of mortgaged residential properties considered as equity rich, according to new data from ATTOM. This is down from 46.1% in the fourth quarter of 2023, marking the third straight quarterly decline, and it is also down from 47.2% in the first quarter of 2023, hitting the lowest point in two years.
The portion of mortgages that were equity-rich decreased in 26 of the 50 U.S. states from the fourth quarter of 2023 to the first quarter of 2024, commonly by less than two percentage points. Measured annually, equity-rich levels dropped from the first quarter of 2023 to the same period this year in 25 states.
Nine of the 10 states with the highest levels of equity-rich mortgaged properties during the first quarter were in the Northeast or West regions. Those with the largest portions were Vermont (82%), Maine (59.2%), Montana (58.7%), California (58.6%) and New Hampshire (57%).
Nine of the 10 states with the lowest percentages of equity-rich properties during the first quarter were in the Midwest or South. The smallest portions were in Louisiana (20.1%), Oklahoma (28.1%), Illinois (28.3%), Kentucky (28.7%) and Alaska (29.5%).
Also in the first quarter, the portion of mortgaged homes that were seriously underwater inched up year-over-year by 0.1 percentage point to 2.7%.
“Homeowner balance sheets continue to benefit in a huge way from the boom times in the form of elevated equity that can be used to help finance all kinds of things, from home renovations to business startups. Still, the windfalls are starting to erode bit by bit amid mounting signs that the market is no longer so super-heated,” said Rob Barber, CEO for ATTOM. “It’s too early to make any broad statements about the market direction, especially coming off the typically slower Fall and Winter months. But amid the recent trends, this year’s Spring buying season will be of heightened importance in telling us if there is a new long-term market pattern developing.”
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