As home prices reach record highs, more homeowners are gaining significant equity, meaning that some can even sell their homes for twice the amount they owe on their mortgages, according to Realtor.com. In the third quarter of 2021, roughly 39.5% of homes with equity in the United States were equity rich compared with 28.3% of homes a year ago. Homeowners are also putting more money down when buying a home in today’s market, which builds equity right away.
Almost every state saw equity rates increase and underwater rates decrease, but the states with the largest share of equity-rich homes are concentrated in the West, where prices are also the highest.
Idaho, where prices have boomed in recent years, leads the pack as 65.1% of all homes with mortgages there were equity rich. Median list prices in the state surged nearly 28% in October compared with the same month a year earlier, according to the most recent Realtor.com® data. The rise is largely due to an influx of new residents moving in from California and other pricey states over the past few years, particularly during the COVID-19 pandemic.
The other states with the highest rates of home equity were Vermont (61.2%), Utah (60.9%), Washington (56.2%), and Arizona (53.2%).