AZ Equity-Rich Homes Percentage More Than Doubled in One Quarter
Arizona home equity leads recent surges by skyrocketing their numbers of equity-rich homes from 16.3% in Q1 2021 to an impressive 39.7% in Q2, according to ATTOM Data‘s recently-released Q2 2021 U.S. Home Equity & Underwater Report. The report reveals that over one third of mortgaged residential properties in the U.S. were considered equity-rich*. In other words, the combined estimated loan amounts secured by that 34% were under half of their estimated market value, jumping over 3% from Q1 2021 and 7% from Q2 2020.
Additionally, ATTOM reported the number of critically underwater** mortgages dropped from 5.2% to 4.1% in just one quarter, and down from 6.2% one year prior. All of this is to highlight the resilience of the United States housing market in the face of an economy in recovery as well as a global pandemic, continuing a now-decade-long boom. The report also found that AZ had one of the smallest percentages of being critically underwater at just 1.7%.
Arizona In Good Standing Among the Nation
Second quarter equity rose by 11 percent nationwide and 22 percent year over year with median values rising at least 15 percent annually in a large number of metropolitan markets across the country. With interest rates currently at a low, combined with owners’ increased desire to relocate to less Covid-affected neighborhoods have created protection from the pandemic’s financial effects. In fact, only one of 106 metropolitan areas that were analyzed did not show an increase in levels of equity-rich homes between the first and second quarter of 2021.
As Arizona leads equity surges in Q2, the region is on pace to have the largest shares of equity-rich homes in the West.
*Equity-rich is defined as having a LTV ration of 50% or lower. This means the property owner had at least 50% equity.
**Critically underwater is defined as having a LTV ration of 125% or above. This means the property owner owed at least 25% more than the estimated market value of the property.
ATTOM Data calculates these statistics based on several categories of loan to value (LTV) at the state, metropolitan, county, and zip code levels alongside the percentage of total properties with a mortgage contained within each equity category. The LTV is calculated based on public records of mortgage and deed trust data collected nationwide of over 155 million properties.