According to data from the U.S. Home Equity and Underwater Report put together by RealtyTrac, the number of properties with at least 50 percent equity grew by more than a million between the second quarters of 2014 and 2015. The most recent period ended with 10.9 million properties being equity rich, which is about 19.6 percent of all mortgaged properties. However, that number is still smaller than in the previous quarter, ending with 19.8 percent.
It is not only equity rich properties that saw a reduction in their numbers. In the last six months, the number of properties with at least 20 percent equity dropped by more than 900,000. This is not necessarily bad news; the vice president at RealtyTrac stated that it appears that homeowners are taking advantage of increasing home prices and cashing out. This may be in the form of using equity to refinance, upgrading their home or downsizing to an all cash home purchase.
Additionally, he believes that some people may be getting out of owning a home entirely. This would explain why the rate of home ownership has dropped even as Millennials are purchasing more homes.
While the number of equity rich homes rose, the number of homes with a mortgage balance 25 percent or greater than the home’s value rose slightly as well. Currently, 13.2 percent of mortgaged homes are considered to be seriously underwater, but the number is still far lower than at its peak in the second quarter of 2012, when 28.6 percent of mortgages had this classification.
