Record levels of equity reduce risks of local domestic market collapse

Residence REAL ESTATE Record levels of equity reduce risks of local domestic market collapse

Homeowners in the Tri-Cities area continue to benefit from rising home prices. The current Home Equity & Underwater report from Atom Data Solutions shows that the share of equity-rich mortgage properties has almost doubled compared to last year. And the number of homeowners who owed more than the estimated value of their property showed steep declines.

“Record levels of home equity are providing financial security for millions of families and minimizing the risk of another housing market meltdown like the one we saw in 2008. But these higher home prices and rising housing Interest rates make it extremely difficult for first-time buyers to enter the market,” according to Rick Sharga, executive vice president of market intelligence at Attom.

Add buyers looking for affordable housing to the list of those feeling the pinch of rising prices. Although the rate of local home sales is declining, prices continue to rise. According to the Northeast Tennessee Association of Realtors (NETAR) Home Sales Report, the median selling price of existing homes in April was $220,000, up 13.7% from a year ago. The four-month median price trend is up 15.6% from a year ago.

Attom’s analysis shows that owners of 2,165 (3%) of mortgaged properties in the area owned 25% or more of the estimated value of their homes. Underwater properties in the Tri-Cities area peaked in 2018 and have declined each year. The first quarter peak is down 81% from the 2018 annual peak. The current U.S. underwater rate is 3.2% and Tennessee is 2.9%.

According to the analysis, there were 32,653 (44.8%) equity-rich local mortgage properties in the first quarter. And equity for 12 of the local ZIP codes rose from their fourth quarter levels. Rich equity means the owner had 50% more equity. A few years ago, the 30% equity levels in some local markets – like Sullivan Co. – were far above the US norm. The wealth rate in US stocks in the first quarter is 44.9% and 51.2% in Tennessee.

Eleven of the 17 local ZIP codes in the analysis had equity-rich status above the national average. Blountville ZIP Code 37663 and Kingsport were the only residents with a capital share above the Tennessee average – the 11and the highest in the country.

The analysis included 72,862 mortgaged local properties. This represents 37% of the total number of households in these 17 households in the Tri-Cities area.

‹ Strong fundamentals drive the local commercial market forward

Categories: REAL ESTATE