Home Equity Trends: What Homeowners Should Know About the Latest Market Data

The third quarter of 2024 showed a leveling-off in home equity growth, but many homeowners are still in a strong position. According to the latest report from property analytics firm ATTOM, 48.3% of mortgaged residential properties in the U.S. were considered equity-rich, meaning the amount owed was no more than half of their estimated market value. Although this is slightly down from the 49.2% peak in the previous quarter, it’s still higher than last year’s 47.4%.

What’s Behind the Numbers?

Home equity often mirrors home-price trends, and with property values surging in recent years, equity-rich homeowners continue to hold a significant advantage. Despite a cooling in sharp price increases, this high equity provides financial leverage for major investments or purchases.

Meanwhile, homes with mortgages classified as "seriously underwater" (where the loan balance exceeds the home value by at least 25%) remain near five-year lows. Just 2.5% of properties fell into this category in the third quarter, up slightly from 2.4% last quarter but stable compared to last year. This indicates that the vast majority of homeowners are in a stable financial position and will not have to experience the massive wave of foreclosures that was seen in 2008. As a result home values are less likely to crash, signaling the stability of the overall market. 

Key Takeaway for Homeowners

The market’s stability, paired with seasonal shifts, indicates minor fluctuations in equity gains over the coming months. Homeowners in regions with rising property values and substantial equity can continue to benefit from the financial flexibility that comes with increased home equity. However, those in regions facing declining trends or high underwater rates should remain vigilant and informed as market conditions evolve.

For homeowners and prospective buyers, understanding these patterns can help guide decisions about refinancing, selling, or investing in real estate. The best way to get hyper-local information about what is going on in your immediate area is to partner with an experienced real estate professional. Our team of local experts can help you to understand how much equity you have in your home, what your home could potentially be worth in today’s market, and how to best take advantage of that equity. Give us a call today for a free consultation!