A new data report from ATTOM determined 46.1% of mortgaged residential properties were considered equity rich in the fourth quarter of 2023, down from 48% one year earlier and down from 47.4% in the third quarter for the second consecutive quarterly decline. The portion of mortgages that were equity rich decreased in 41 of the 50 U.S. states.
Also in the fourth quarter, the share of mortgaged homes that were seriously underwater was 2.6%, inching up slightly from 2.5% in the third quarter. The biggest increases were clustered in the Midwest and South, most notably in Wyoming where the share of mortgaged homes that were seriously underwater up from 5.9% in the third quarter to 8.8% in the fourth quarter.
“There are increasing signs suggesting that the extended period of prosperity in the U.S. housing market may be showing signs of easing,” said Rob Barber, CEO for ATTOM. “It’s not as if there are big warning signs flashing. Similar things were happening early last year before the market surged in the Spring. But the softening of equity follows a dip in resale profits last year for the first time in more than a decade as prices have stopped soaring through the roof. This year’s peak buying season will tell us a lot about whether things really have settled down long-term.”
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