Report: state’s homeowner equity rises in second quarter

According to Attom Data Solutions’ second-quarter 2021 U.S. Home Equity & Underwater Report, of the 379,887 mortgaged homes in Arkansas, 84,226 (22%) are considered equity-rich. That means those mortgagees own homes that are now worth more than twice their mortgage balance.

Attom Data Solutions of California tracks national housing and foreclosure data.

Arkansas’ home equity is one of the lowest percentages in the country (No. 41), but it’s up considerably from 16.9% in the second quarter of 2020.

Todd Teta, Attom’s chief product officer, says equity has continued to improve because price increases have widened the gap between what homeowners owe on mortgages and the value of their properties. He said it’s also another sign that the U.S. housing market has resisted damage to the broader economy brought about by the COVID-19 pandemic that hit early last year.

Of the 54 million mortgaged homes in the U.S., 18.7 million (34.4%) are considered equity-rich. That’s up from 31.2% in the first quarter of 2021 and from 27.5% in the second quarter of 2020.

“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 owners who saw their typical equity improve more than at any time in the last two years,” Teta said. “Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country.

“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, few assets keep on giving so much as homeownership.”

The report also breaks down home equity among 106 metropolitan statistical areas (MSA) with a population greater than 500,000. Of the 91,168 mortgaged properties in Northwest Arkansas, 25,245 (27.7%) are considered equity-rich. That’s up 19.8% from a year ago.

In central Arkansas, where there are 129,415 mortgaged properties, 22,607 (17.5%) are considered equity-rich. That’s up 14% from a year ago.