May saw the regular release of ATTOM Data Solution’s quarterly Home Equity report. This year, ongoing events created the need for some additional commentary.
As the “curator of the nation’s premier property database,” ATTOM’s figures can be relied upon to gauge the nation’s residential real estate equity levels—Mesa or Delta County homes included. This latest report covered 2022’s first quarter. It takes a while to collect and verify all the data—but recently, for optimists, the wait was worthwhile: the report card was a “rosy” one.
But, needless to say, a lot has changed since the end of March—hence the additional commentary.
The report showed that nearly half the homes in the U.S. qualified as “equity rich,” defined as a property with outstanding home loans totaling less than 50 percent of their estimated market value. When compared with the meager 3.2 percent of homes considered “seriously underwater” (those with loans totaling at least 25 percent more than their market value), the overall health of homeowners’ balance sheets looked strong.
But a company spokesman had to admit the obvious: this “rosy” first-quarter report needed to be taken in context: “Homeowners continue to benefit from rising home prices,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Record levels of home equity provide financial security for millions of families and minimize the chance of another housing market crash like the one we saw in 2008. But these higher home prices and rising interest rates make it extremely challenging for first time buyers to enter the market.”
In other words, at least in the immediate near term, the outlook for first-time homebuyers could be expected to suffer—at least until interest rates and home inventory return to more normal levels. That’s something not expected to happen until at least the end of the year. And possibly longer.
All in all, looking for precise guidance on future conditions is even less fruitful than usual. As Norada commentator Marco Santarelli put it, “housing market predictions run the gamut from optimistic to pessimistic.” Mesa or Delta County home sellers may continue to gain leverage due to still-modest mortgage rates and tight inventories (expected to continue) — but with national economic factors in flux, housing market predictions are necessarily unreliable. For a concrete reading on the latest local Mesa or Delta County real estate activity, call us!