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DS News November 2022

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29 Journal HALF OF MORTGAGED HOMES NOW CONSIDERED EQUITY RICH ATTOM Data has released its findings covering the third quarter of 2022 of its Home Equity & Underwater Report which found that overall, 48.5% of all mortgaged residential prop- erties in the country were considered equity rich. e number of properties that are considered equity rich increased from 39.5% during the third quarter of 2021, and from 48.1% during the second quarter of 2022. e latest increase fell below other gains in recent years. It marked the 10th straight quarterly rise and resulted in virtually half of all mort- gage payers landing in equity-rich territory. Additionally, the report found that at least half of all mortgage payers in 20 states were equity-rich in the third quarter, compared to only seven states a year earlier. "Even though home price appreciation has slowed down dramatically in recent months, homeowners have continued to build equity," said Rick Sharga, EVP of Market Intelligence at ATTOM. "And it appears that many of those homeowners have decided to stay where they are rather than purchase a new home, and are beginning to tap into that equity, as the number of home equity lines of credit (HELOCs) issued in the second quarter of 2022 rose by 43% from the prior year." e report also shows that just 2.9% of mort- gaged homes, 1 in 35, were considered seriously underwater in the third quarter 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. e data further shows that 94.3% of home- owners had at least some equity built up during the third quarter, a number that is up from 92.9% a year ago and 87.7% in 2020. On a state-by-state basis, 39 states saw equity increase from the second quarter of 2022 while seriously underwater numbers dipped in 38 states. Year-over-year, equity-rich levels rose in all 50 states and seriously underwater portions dropped in 43 states. According to ATTOM, the ongoing im- provement in home equity during the third quarter of 2022 came as the U.S. housing market cooled considerably amid multiple forces that threaten to stifle or reverse an 11-year run of nearly uninterrupt- ed price spikes and equity gains. number of for-sale homes was still down year over year in the remaining eight markets, by the largest amounts in Hartford, Connecticut (-25.7%); Virginia Beach, Virginia (-11.0%); Milwaukee (-9.6%); and Chicago (-9.6%). » On average across the 50 largest metros, no regions saw year-over-year new listing increases in October, with the greatest declines registered in the West (-20.6%), followed by the Northeast (-17.4%), Midwest (-15.0%), and South (-9.8%). Furthermore, newly listed homes increased in just four markets: Nashville, Tennessee (+10.5%); New Orleans (+6.2%); Dallas (+5.6%); and San Antonio (+1.4%). » Compared to October 2020, active inventory was higher in 32 of the 50 biggest markets, led by western (+33.9%) and southern metros (+7.2%): Phoenix (+132.0%); Austin (+120.8%); Riverside, California (+67.2%); Memphis (+59.7%); and Nashville (+55.7%). Inventory remained lower than two years ago in the Northeast (-21.1%) and Midwest (-7.9%). Competition Stalls as Home Listing Prices and Time on Market Hold Steady With home sales activity declining along with affordability in October, national trends reflected a market in which competition con- tinued at a cooler pace than during this year's summer peak. However, compared to last month, there was little change in both listing prices and time on market. is may be partly attributed to regional variations in supply and demand dy- namics, with still-strong home shopper interest in relatively affordable markets balancing out the slowdown in other areas. In the Midwest and Northeast, where buyers saw relatively smaller inventory improvements in October, time on market and the share of homes with price re- ductions posted smaller year-over-year increases than in other regions. » In October, national listing price trends were relatively unchanged from the prior month, with the median listing price dipping just $2,000 to $425,000. Additionally, annual home listing price growth decelerated just slightly, to 13.3% from 13.9% in September. » On average across the 50 largest U.S. metros, yearly listing price growth entered single- digit territory in October (+9.2%). However, for-sale home prices continued to rise by double-digits year over year in 20 markets, led by Milwaukee (+34.5%), Miami (+25.1%), and Kansas City (+21.4%). » e share of homes with price reductions was up 10.3 percentage points to 20.9% in October, well above 2017 (18.1%) and 2019 (17.0%) levels, but just under the 2018 share (21.2%). Western (+18.9 percentage points) and southern metros (+13.6 percentage points) posted the greatest increases in the share of price reductions: Phoenix (+35.9 percentage points), Austin (+31.2 percentage points), and Las Vegas (+24.4 percentage points). » e typical home spent 51 days on the market in October, six days more than last year, but still 20 days faster than the typical 2017-2019 pace. e metros where homes spent longest on the market compared to October 2021 were Raleigh (+27 days), Austin (+26 days), Phoenix (+21 days), and Las Vegas (+21 days). » Time on market declined year over year in October in 10 of the 50 largest metros, led by New Orleans (-21 days), where last year's pace was impacted by Hurricane Ida, followed by Richmond, Virginia (-15 days), and Birmingham, Alabama (-6 days). Higher Housing Costs Fuel Demand From Out-of-Town Home Shoppers Similar to October's for-sale housing trends, the Realtor.com Q3 Cross-Market Demand Report highlights regional variations in home- buying activity. With rising rates pushing the typical monthly mortgage payment up 77.1% in October compared to a year ago, some buyers are potentially trying to add room in their budgets by searching further from where they live for lower-priced homes. Nationwide in Q3 2022, 60.7% of listings views on Realtor.com came from users located outside of the listing's metro, compared to 56.9% during the prior quarter and 52.1% at the same time last year. Regionally, northeastern (69.0%) and western (65.7%) home shoppers were most likely to search out-of-market in Q3. is may be attributed to buyers looking for relative affordability, as October median listing prices were higher across large metros in the Northeast ($440,000) and West ($763,000) than in other regions, on average.

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