"The best of the boom may be behind us"
Almost half of US mortgaged homes were considered equity-rich in the first quarter, according to the findings of ATTOM's new home equity and underwater report.
About 47.2% of mortgage residential properties were equity-rich in Q1, slightly down from 48% in Q4 2022. This drop marked the second consecutive quarterly decline in home equity, following 10 straight increases.
"The equity downturn, small as it was, stood as the latest indicator of how a decline in home prices across much of the country has started to affect homeowners following a decade-long market boom," CoreLogic noted in the report. "It comes as home-seller profits have slid to their lowest point in two years."
Meanwhile, 3% of mortgaged homes, or one in three, were considered seriously underwater in the first quarter. That figure was almost unchanged from 2.9% in the previous quarter and down from 3.2% in the same period a year ago.
"Homeowners across the US 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," said Rob Barber, chief executive officer for ATTOM.
"However, the recent downturn in the housing market is chipping away at the bounty they reaped from a decade of price surges. Home equity has fallen modestly amid a larger slump in profits homeowners are getting when they sell. It's still too early to call this a long-term trend, and there are reasons to hope for a market turnaround this year. For now, though, various measures suggest that the best of the boom may be behind us."
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