All About Home Equity-Rich States in the U.S.

Nov 19, 2023 By Susan Kelly

There's plenty to be concerned about in today's economy – extremely high inflation, the risk of a recession, and continuous uncertainties about what's next in the pandemic. However, there is a glimmer of hope if you are a homeowner.

Recent research by ATTOM Data Solutions found that due to the housing market's continuous ascent over the previous two years, nearly half of homeowners with mortgages are now termed "equity-rich." When the amount owed on a home's mortgage is less than 50 percent of the home's fair market value, the homeowner has a substantial amount of equity.

States with the most home equity

To find a region where homeowners have built up the most equity, travel westward, albeit Vermont keeps the East Coast in the running. According to ATTOM Data Solutions, the top states for home equity are

As a result, many current homeowners are cashing out some of their equity, which is fantastic news if you own a property in one of these areas, but bad news for anyone looking to buy right now. Because of the dramatic increase in property prices, first-time homebuying has become increasingly difficult for younger generations.

Locations where homeowners have the most equity in their homes From the top 40 equity-rich cities ATTOM found, 39 were located in states in the South and West. For the second quarter, the top was Statistics from the city of Austin: 76.5 percent.

Stock market increases in leading states

Some groups of homeowners witnessed exceptionally high increases in their share between the first and second quarters of 2022:

Worst-hit states by home values It's not like everyone has benefited from the red-hot property market. It's still widespread for some homeowners to have much more mortgage debt than their home is worth. A home is "significantly" underwater if the mortgage balance is at least 25% more than the property's estimated market value, as calculated by ATTOM.

Homeownership problems were worst in the South and the Midwest in the second quarter of this year. While Wyoming is still on this list, it's crucial to note that the state's equity boom reduced this number by half from the end of 2021.

Even though home equity is rising steadily across the country, a few areas experienced an increase in the number of underwater homeowners between the first and second quarters of the year. There was a rise from 3 percent to 3.9 percent of Montana homeowners who are severely underwater on their mortgages. Smaller gains of 2.9% to 3% and 2.7% to 2.8% were also seen in New Jersey and New York, respectively.

For the record

As a result of their homes' increased worth, many people now have access to substantial amounts of equity. Homeowners in several housing markets in the South also see gains, but the West is where you'll find the most considerable equity. Take advantage of your home's equity with these helpful links:

Building Equity in Your Home The value of your home's equity is rooting for you, and we are. We welcome any suggestions, not only those about house repairs. Let's look at your home's equity and how a home equity loan or line of credit could help you achieve your goals.

Seek Employment Now It's time to finally tackle that kitchen renovation project you've been putting off. You are installing a fitness center in your house (and tossing that dusty ab exercise chair). Stop putting off expensive window replacements and roof repairs - save on energy bills, too! Take advantage of the reduced interest rate by making a significant purchase (a new car, perhaps?).

Line of Credit Against Home Equity (HELOC)

An excellent choice for situations calling for greater adaptability. You can take out loans as needed, drawing from a predetermined sum. Take out a loan equal to up to the total value of your home (maximum loan amounts apply)

To qualify for a variable rate as low as prime minus 0.50%, your credit score must be at least 650. Commit to a low rate for up to 15 years by locking your balance. Reasonable or no closing expenses Forget about annual fees and prepayment penalties; number 5 You can write off interest payments on your taxes (if eligible)

Home Equity Line of Credit with Interest Only (HELOC)

An excellent alternative for searching for a lower, more affordable payment. Payments comprise interest accrued on loan – no principal – throughout the "draw" or borrowing period. Get ALL the perks of a normal HELOC at the same low rate!

The minimum payment is only the interest accrued on loan since the last due date, or $50 (whichever is greater). More significant amounts can be made whenever convenient (helpful for those with commission or seasonal jobs

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