Fewer Indiana properties are ‘equity-rich’ according to report

(The Center Square) — Fewer Hoosier homeowners now owe less than half of their home’s value on their mortgages than they did at the end of 2023, according to a report by a California-based company that collects real estate data.

ATTOM, in its U.S. Home Equity & Underwater Report for the first quarter of 2024, found just 40.9% of mortgages tied to a residential property in Indiana could be considered “equity-rich.” That was down from 43% in the previous quarter, and the 2.1 percentage-point drop was the fifth highest nationally.

In a release, the firm noted that the national median value for single-family homes and condominiums fell by 4% over the winter and was only up 3% from the first quarter of 2023. It added that equity in a home can drop even as the homeowner continues to pay down their mortgage since it’s based on the ratio of the mortgage balance to the home’s estimated value.

An “equity-rich” mortgage is defined as a loan where the balance is less than 50% of its perceived value. According to the report, Indiana was one of 26 states that had fewer houses meet those criteria.

Indiana does trail the nation when it comes to equity-rich residential properties. The national rate is 45.8% nationally, but it, too, is sliding. This was the third consecutive quarterly decline and the lowest the rate has been in two years. However, ATTOM CEO Rob Barber said there are still some bright spots for many homeowners.

“Homeowner balance sheets continue to benefit in a huge way from the boom times in the form of elevated equity that can be used to help finance all kinds of things, from home renovations to business startups. Still, the windfalls are starting to erode bit by bit amid mounting signs that the market is no longer so super-heated,” he said. “It’s too early to make any broad statements about the market direction, especially coming off the typically slower Fall and Winter months. But amid the recent trends, this year’s Spring buying season will be of heightened importance in telling us if there is a new long-term market pattern developing.”

Indiana wasn’t alone regionally in seeing a loss of equity. Kentucky had the steepest drop of any state from quarter to quarter, going from 35.4% to 28.7%. Both Kentucky and Illinois (28.3%) ranked among the bottom 10 for equity-rich properties. Meanwhile, both Cook County, Illinois, with a rate of 26.5%, and Jefferson County, Kentucky, with a rate of 26.7%, were among the bottom five for equity-rich rates for counties with a population of 500,000 or more.