Many American homeowners have seen their wealth grow in the past two years as the US real estate market experienced unprecedented frenzy.
Homeowners living in less-populated western states, in particular, saw their home values skyrocket, as remote work allowed many white-collar workers the flexibility to move further from urban centers and acquire more space. at more affordable prices.
In Idaho, for example, home prices increased 41% between the third quarters of 2020 and 2022, respectively, according to data from the Federal Housing Finance Agency.
Portland Real Estate looked at real estate data platform ATTOM’s quarterly home equity report to see which states have the highest share of wealth-rich homeowners in the third quarter of 2022. In the event of a tie, the number was used. owners gross.
Even though home price growth has slowed in the second half of this year, most American homeowners still saw an increase in home equity. Households are considered equity-rich, or “home-rich,” when the owner’s outstanding mortgage balance is half or less of the home’s estimated market value. Nationwide, about 48.5% of homes with mortgages were considered equity-rich in the third quarter, the 10th straight quarter of gains.
From 2002 to 2022, Americans have collectively seen the portion of their wealth that is tied up in residential real estate grow by $20 trillion, an upward trend line that became more pronounced in 2020 and 2021, according to the Federal Reserve.
Many of the most capital-rich homeowners are on the West Coast, while the Midwest and South have the fewest. In today’s high interest rate environment, homeowners have limited avenues to tap into the equity they have built up in their homes. Home equity lines of credit, or HELOCs, increased in popularity earlier this year, but could become less attractive as interest rates rise higher.
