It’s starting to really pay off for homeowners who are choosing to stay in their houses and not move. With home prices steadily rising, homeowners are able to build more equity and become equity rich, meaning their home is worth more than 50% of what they owe.
The number of homeowners who are seriously underwater (have an LTV of 125 or higher) decreased from last year by 854,000 homeowners to more than 6 million this year. This represents 10.8% of all homeowners with a mortgage.
“Median home prices increased on a year-over-year basis for the 18th consecutive quarter in Q3 2016, and homeowners who sold in the third quarter had owned their home an average of 7.94 years — a new high in our data and substantially higher than the average homeownership tenure of 4.26 years pre-recession,” Blomquist said. “As homeowners stay in their homes longer before moving up, they are amassing more home equity wealth.”
Many homeowners are becoming equity rich because they’re staying in their homes longer, according to the Q3 2016 U.S. Home Equity and Underwater report from ATTOM Data Solutions, a fused property database. To be equity rich, homeowners must have a loan-to-value ratio of at least 50%