We’ve all seen the devastation COVID-19 is wreaking as it marches across the country and world. But who could have predicted the virus would actually be a shot in the arm in terms of home equity?
According to a study by Attom Data Solutions, reported by the Denver Business Journal, the percentage of “equity rich” homeowners jumped from 27.5% the second quarter of 2020 to 34.4% a year later. “Equity rich,” according to the Journal, means that “the total loans on the property were half or less than half of the property’s total value.”
The virus has increased demand for homes, which has lifted prices across the country. Indeed, median home prices rose 22% nationally from 2020 to 2021.
“Rapidly rising home values mean fewer homeowners are seriously underwater on their mortgages, in which the loans on the home are 25% or more of the homes estimated value,” notes the Journal.
The number of homes underwater is 4.1% of total homes, down from 6.2% in the first quarter of 2020.
“The improvements were the largest in two years and provided yet another sign the housing market resisted the damage Covid-19 caused in other sectors over the last 18 months,” reports the Journal.
That’s rare good news when it comes to the pandemic, which brings bad news daily.
“Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country,” Todd Teta, chief product officer with Attom said in a press release. statement.
“There are still a lot of questions hanging over the near future of the U.S. housing market, with some connected to how well the economy keeps recovering from the pandemic, and some not,” he continued. “We’ll keep watching those closely, though for now, there are few assets that keep on giving so much as homeownership.”