Equity Rich Trend

When a homeowner stays in their home for a long period of time, they become equity rich. They build their loan-to-value ratio of at least 50%.  This happens to be the trend that is happening lately as reported by the ATTOM Data Solutions.

Their report was taken in Q3 2016, labeled the U.S. Home Equity and Underwater Report. It found that 23.4% of the nation’s homeowners are considered equity rich, which is an increase of 2.6 million from Q3 of 2015.

The homeowners who are basically drowning have an LTV of 125 or higher, saw a decrease from last year by 854,000, settling at about 6 million. This segment is roughly 10% of all homeowners.

The second quarter reported that 6.6 million homes were underwater, nearing 12% of the total properties.

Luckily, today’s market sees that around one in every five homeowners is now equity rich. This is in thanks to property prices rising, and people staying in their homes longer.

Median home prices are rising every year, and this month is the 18th straight month homes have increased in price. The homeowners who sold their home this third quarter have owned their homes on average for almost 8 years. Since they are staying in their homes longer, they are building their equity wealth. They own more and more of their homes, while the banks own less and less.

Some fun facts: Out of 88 cities with at least 500,000 residents or more, San Jose had the highest amount of equity rich homeowners, with a whopping 55.7%. Honolulu was second with 39.3% and Los Angeles just behind them at 38.2%.

 Out of the 88 cities, a lot of homes still showed being underwater, like Las Vegas with 25%, Akron with 24.2%. Cleveland wasn’t far behind with 22.8%, and several other Ohio cities were just behind them. Detroit came in at 20%, and Lakeland-Winter Haven, Florida also saw 20%.

 

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