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106 106 INVESTMENT GOVERNMENT PROPERTY PRESERVATION SHARE OF SERIOUSLY UNDERWATER MORTGAGES SLIPS BELOW 3% ATTOM has released its Q2 2022 U.S. Home Equity & Underwater Report, which shows that 48.1% of mortgaged residential properties in the U.S. were considered equity rich in Q2, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50% of their estimated market values. e portion of mortgaged homes that were equity rich in Q2 of 2022 increased from 44.9% in Q1 of 2022 and from 34.4% in Q2 of 2021. e latest increase, to virtually half of all mortgage payers, marked the ninth straight quarterly rise in the portion of homes in equity-rich territory. e report found that at least half of all mortgage-payers in 18 states were equity-rich in Q2, compared to only three states a year earlier. e report also shows that just 2.9% of mortgaged homes —or one in 34— were considered seriously underwater in Q2 of 2022, with a combined estimated balance of loans secured by the property of at least 25% more than the property's estimated market value. at was down from 3.2% of all U.S. homes with a mortgage in the prior quarter and 4.1% —or one 24 properties— a year earlier. "After 124 consecutive months of home price increases, it's no surprise that the percentage of equity rich homes is the highest we've ever seen, and that the percentage of seriously underwater loans is the lowest," said Rick Sharga, Executive VP of Market Intelligence at ATTOM. "While home price appreciation appears to be slowing down due to higher interest rates on mortgage loans, it seems likely that homeowners will continue to build on the record amount of equity they have for the rest of 2022." Across the country, 49 states saw equity- rich levels increase from Q1 of 2022 to Q2 of 2022, while seriously underwater percentages dipped in 46 states. Year-over-year, equity- rich levels rose in all 50 states and seriously underwater portions dropped in 46 states. e equity scenario continued improving in the second quarter for homeowners around the U.S., mainly because home values kept soaring. After a flat first quarter, the median single-family home price shot up another 9% quarterly and 15% annually during the Spring of this year to a new high of $346,000. For owners keeping up with mortgage payments, that meant a widening gap between what they owed and what their homes were worth, boosting more home values into equity-rich status. In addition, down payments for recent buyers have grown from about 5% to 7% over the past couple of years, resulting in new owners starting off with more equity. In Q2 of 2022, equity continued on a relentless upward path despite significant economic uncertainties connected to home- mortgage rates doubling this year, inflation soaring at 40-year highs, rising fuel costs and other issues. While the chances of even more improvement remain uncertain, there is little immediate sign that equity gains will flatten out, especially as home buyers keep chasing a historically tight supply of properties for sale. Equity-rich share of mortgages rises most in the South Seven of the 10 states where the equity- rich share of mortgaged homes increased most from Q1 to Q2 of 2022 were in the southern region of the U.S. e biggest increases were in Wyoming, where the portion of mortgaged homes considered equity-rich rose from 26.1% in Q1 to 33.9% in Q2. Maine followed, (up from 48.5% to 56.3%), succeeded by Florida (up from 53.6% to 60.4%), Mississippi (up from 23.5% to 29.1%), and South Carolina (up from 41.2% to 46.5%). States where the equity-rich share of mortgaged homes decreased, or went up the least, from Q1 to Q2 of this year were New Jersey (down from 38.6% to 37.9%), Utah (up from 63.6% to 64.3%), Idaho (up from 68.8% to 69.5%), North Dakota (up from 28.6% to 29.5%), and West Virginia (up from 26.9% to 28.4%). Largest declines in seriously underwater properties spread across Northeast, South, and Midwest States with the biggest decreases in the percentage of mortgaged homes considered seriously underwater from the first quarter of 2022 to the second quarter of 2022 were spread across the Northeast, South and Midwest. ey were led by Mississippi (share of mortgaged homes seriously underwater down from 17% to 8.1%), Wyoming (down from 10% to 7%), Missouri (down from 6.6% to 5.2%), Maine (down from 3.1% to 2.2%), and Connecticut (down from 4% to 3.3%). e only states where the percentage of seriously underwater homes increased from Q1 to Q2 of this year were Montana (up from 3% to 3.9%), New Jersey (up from 2.9% to 3%) and New York (up from 2.7% to 2.8%). Top equity-rich counties located in Northeast, South, and West Among 1,624 counties that had at least 2,500 homes with mortgages in Q2 of 2022, 49 of the top 50 equity-rich locations were in the Northeast, South, and West. Counties with the highest share of equity- rich properties were: » Dukes County (Martha's Vineyard), Massachusetts (83.2% equity-rich) » Chittenden County (Burlington), Vermont (82.3%) » Gillespie County, Texas (west of Austin) (79.4%) » Nantucket County, Massachusetts (78.6%) Journal

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