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46 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Homeownership: Asset That 'Keeps on Giving' Price jumps that helped sellers earn big profits also led to equity improvements not seen in years, according to analysts. T he surge in home prices over the past year or so has led to a large increase in homeown- ers' equity nationwide, and that could reduce the number of foreclosures—and increase the number of houses listed for sale—in the coming months. ATTOM's second-quarter 2021 U.S. Home Equity and Underwater Report showed more than 34% of mortgaged residential properties were considered equity rich (combined estimated amount of loans secured by those proper- ties was no more than 50% of their estimated market value). That one-in-three estimated equity rich households represents an increase from 31.2% in the first quarter of 2021 and from 27.5% in the second quarter of 2020. In addition, only 4.1% of mort- gaged homes, or one in 24, were considered seriously underwater (meaning the estimated balance of loans secured by the property at least 25% more than the property's estimated market value) in Q2 2021. That is down from 5.2% last quar- ter and down from 6.2% during the same period. "The huge home-price jumps over the past year that helped millions of sellers earn big profits also kicked in big-time during the second quarter for other own- ers who saw their typical equity improve more than at any time in the last two years. Instead of the virus pandemic harming homeowners, it's helped create conditions that have boosted the balance sheets of households all across the country," said Todd Teta, Chief Product Officer with ATTOM. "There are still a lot of questions hanging over the near future of the U.S. housing market, with some connected to how well the economy keeps recovering from the pandemic, and some not. We'll keep watching those closely, though for now, there are few assets that keep on giving so much as homeownership." In 48 states, equity-rich levels increased and seriously underwa- ter percentages decreased from the first quarter to the second quarter 2021. Every state saw equity-rich levels rise and the seriously under- water portion drop compared to the second quarter of 2020. The improvements at both ends of the equity scale were the largest in two years and provided yet another sign that the United States housing market has resisted damage to the broader economy brought about by the coronavi- rus pandemic that hit early last year," ATTOM reported. "As the economy has gradually recovered in 2021, the housing market boom has continued for 10 straight years, with gains across most measures." As foreclosure moratoria both federal and local expire, eventually, this collective rise in homeowner equity means that struggling borrowers most likely will be able to sell their home before facing foreclosure. As some homeowners face pressure to sell, it also could mean further replen- ishing a market in short supply. Unlike the financial crisis, a time when many borrowers were underwater on their mortgages, borrowers who are currently delinquent on their mortgage payments can tap into their equity and sell their home rather than lose it through foreclosure, CoreLogic's Frank Martell said when his company issued its own equity report. "Homeowner equity has more than doubled over the past decade and has become a crucial buffer for many weathering the chal- lenges of the pandemic," he said at the time. "This reduces the likelihood of large numbers of distressed sales from homeowners who emerge from forbearance later in the year." Granted, the Forbes real estate council predicts that the market also could see a wave of foreclosures.