Equity in U.S. Homes Rises in the First Quarter of 2022

Americans have more equity in their homes, thanks to a red-hot housing market pushing up the value of their properties, new research shows.

In the first quarter of 2022, 44.9 percent of the homes in the United States were considered “equity-rich,” meaning the balance of the loan on the home was 50 percent or less of the estimated market value, according to a new report from Attom, a real estate data analytics firm.

That’s slightly higher than the 41.9 percent recorded in the fourth quarter of 2021 and a jump from 31.9 percent in the first quarter of 2021, according to Attom, which analyzed public mortgage and deed-of-trust data for more than 155 million U.S. properties.

The increase in equity is prompting some owners to cash out and move, said Rick Sharga, the executive vice president of market intelligence at Attom.

“What we believe is happening is that people are leaving high-cost, high-tax states, grabbing the equity and buying a house in a low-cost state,” Mr. Sharga said, adding that more than a third of U.S. home sales in the fourth quarter of 2021 were cash purchases, higher than usual.

But as mortgage rates creep up, some homeowners who already have low rates are staying put. “It’s being driven by boomers wanting to age in place,” he said, with more owners investing in home repairs rather than selling. “That inventory is not coming back to market.”

Higher values are also helping to reduce the number of homes that are “seriously underwater”: In the first quarter of this year, according to Attom, 3.2 percent of mortgaged homes had a loan balance that was at least 25 percent higher than the property’s estimated market value, down from 4.7 percent a year earlier.

“Being underwater doesn’t mean you are going into foreclosure,” Mr. Sharga said, pointing to pandemic relief measures like the foreclosure moratorium and the CARES Act, which helped keep Americans in their homes. “Last year was the lowest level of foreclosure level in history.”

For weekly email updates on residential real estate news, sign up here. Follow us on Twitter: @nytrealestate.