Loan limits will likely go up to $625K in 2022, but FHFA hasn’t announced it yet. Still, higher home values have convinced some lenders to boost loan limits now.WASHINGTON –
As Home Prices Rise, More Owners Become ‘Equity Rich’ ☘ Hoey Team ☘ eXp Realty
Dated: August 7 2020
Despite the pandemic, home values continued to climb in the second quarter, with 15.2 million residential properties in the U.S. considered “equity rich,” according to a new report from ATTOM Data Solutions, a real estate data firm.
That means the combined estimated amount of loans secured by those properties was 50% or less of their estimated market value. About 28% of properties in the second quarter were equity rich, up from 26.5% in the first quarter, according to the report.
“Homeowners saw their equity rise far and wide throughout the United States during the second quarter of this year in yet another sign of the housing market punching back against the coronavirus pandemic,” says Todd Teta, chief product officer with ATTOM Data Solutions. “More property owners rose into equity-rich territory and escaped the seriously underwater lane, putting more money into the average household.”
The housing market still faces “enormous challenges,” given historically high unemployment, the recession, and the pandemic, Teta adds. “If that continues, owner equity will be seriously threatened,” he cautions. “But for now, homeowners are enjoying the gains when it comes to what, for most, is their most significant asset.”
The Midwest and South saw the largest improvements in the share of equity-rich homes during the second quarter, according to the report. In Georgia, the share of equity-rich homes jumped from 17.5% in the first quarter to 20% in the second quarter. Other states that saw some of the largest improvements during the second quarter:
- Idaho (up from 33.6% to 35.4%)
- Mississippi (up from 19.3% to 21%)
- Indiana (up from 23.5% to 25.2%)
- Nebraska (up from 18.2% to 19.9%).
Overall, the Northeast and West continue to have the largest shares of equity-rich homes in the country, the ATTOM Data Solutions report shows. The states with the largest shares are:
- California (43%)
- Vermont (39.1%)
- Hawaii (38.6%)
- Washington (38.1%)
By metro level, the cities with the highest share of equity-rich properties in the second quarter were all in the West:
- San Jose, Calif. (64%)
- San Francisco (56.5%)
- Los Angeles (47.9%)
- Santa Rosa, Calif. (45.3%)
- Seattle (40.9%)
In the Northeast, Boston was the leader, with 35.9% of its properties considered equity rich. In the South, Dallas led with 38.3%, and in the Midwest, Grand Rapids, Mich., had the highest share at 28.8%.
Meanwhile, as home prices rise, fewer homes are falling underwater. The ATTOM Data Solutions report showed that just 3.4 million homes with a mortgage nationwide—or 6.2%—were considered seriously underwater in the second quarter. That means the combined estimated balance of the loans on the properties is at least 25% or more than the estimated value.
Here in Southwest Florida, inventory is low, but we continue to list and sell real estate. At our Team ☘ and Brokerage, we have been succesfully working 100% virtually / remotely for the past number of years as we grew, so we have been used to this new requirement.
Article content from our NAR (National Association of Realtors) Newsletter and from other sources including Hoey Team ☘ eXp
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Please let Kim or Barry know if we can do anything to help anyone in need here in Southwest Florida, weither it is for you or for a loved one, and we are able to help in a responsible social distncing way, we will certainly do what we can to help.
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