Homeowner equity ticks down again
Homeowner equity declined modestly for the second straight quarter as home price growth fell across the country, according to new data from ATTOM. But it remains near historic highs.
First-quarter results from ATTOM’S 2023 U.S. Home Equity & Underwater Report showed 47.2 percent of mortgaged residential properties nationwide were considered equity rich — down from 48 percent in the previous quarter. A property was considered equity rich if the combined estimated outstanding loans on the property was no more than half of the property’s estimated market value.
And just 3 percent of homes were seriously under water, which means that a property’s loan balance was at least 25 percent or more than the estimated market value.
“Homeowners across the U.S. continue to sit in a far better position than they were just a few years ago, with historically elevated levels of wealth built up in their properties,” ATTOM CEO Rob Barber said in a statement.
“However, the recent downturn in the housing market is chipping away at the bounty they reaped from a decade of price surges,” Barber added.
The new report follows separate data showing that home sellers’ profit hit a two-year low in the first quarter. Profit margins on typical home sales fell from 48.7 percent in the fourth quarter of 2022 to 44.2 percent in the first quarter of 2023, while median home prices increased just 1 percent, to $321,135.
Home seller profits and home equity have fallen amid the Federal Reserve’s ongoing effort to tamp down inflation through a series of interest rate hikes. This sent mortgage rates soaring, leading home prices to cool from their previous highs.
Yet mortgage rates ticked down for the second straight week to 6.39 percent, despite the central bank’s announcement that it would raise rates again.
“It’s still too early to call this a long-term trend, and there are reasons to hope for a market turnaround this year,” Barber continued. “For now, though, various measures suggest that the best of the boom may be behind us.”
Source: The Hill
