Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 107 NUMBER 21 ■ MECKTIMES.COM
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TUESDAY, MAY 23, 2023
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ChatGPT-powered Wall Street: The benefits and perils of using artificial intelligence to trade stocks and other financial instruments Page 7
Home equity ticks downward again across U.S. as housing market remains stalled ATTOM, has released its first-quarter 2023 U.S. Home Equity & Underwater Report, which shows that 47.2 percent of mortgaged residential properties in the United States were considered equity-rich in the first quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values. The portion of mortgaged homes that was equity-rich in the first quarter of 2023 decreased slightly from 48 percent in the fourth quarter of 2022. While that remained close to twice the level of just three years ago, the drop-off in the first three months of 2023 marked the second straight quarterly decline following 10 consecutive gains. The report found that the portion of equity-rich mortgage-payers went down from the fourth quarter of 2022 to the first quarter of 2023 in 32 states around the U.S. The equity downturn, small as it was, stood as the latest indicator of how a decline in home prices across much of the country has started to affect homeowners following a decade-long market boom. It comes as homeseller profits have slid to their lowest point in two years. Despite the emerging trend in equity-rich mortgages, the report also shows that just 3 percent of mortgaged homes, or one in 33, were considered seriously underwater in the first quarter of 2023. That meant that they had a combined estimated balance of loans secured by the property of at least 25 percent more than the property’s estimated market value. The latest seriously underwater figure was virtually unchanged from 2.9 percent in the prior quarter, and was still down from
3.2 percent in the first quarter of 2022. “Homeowners across the U.S. continue to sit in a far better position than they were just a few years ago, with historically elevated levels of wealth built up in their properties. However, the recent downturn in the housing market is chipping away at the bounty they reaped from a decade of price surges,” said Rob Barber, chief executive officer for ATTOM. “Home equity has fallen modestly amid a larger slump in profits homeowners are getting when they sell. It’s still too early to call this a long-term trend, and there are reasons to hope for a market turnaround this year. For now, though, various measures suggest that the best of the boom may be behind us.”
Largest declines in equity-rich share of mortgages spread across West
The portion of equity-rich mortgages continued to decrease in a majority of states around the U.S. from the fourth of 2022 to the first quarter of 2023, commonly by less than two percentage points. The biggest drops again came in the West, which followed a pattern that began late last year. The firstquarter declines were led by Arizona (portion of mortgages homes considered equity-rich decreased from 59.9 percent in the fourth quarter of 2022 to 56.4 percent in the first quarter of 2023), Nevada (down from 52.3 percent to 49 percent), Idaho (down from 61.6 percent to 58.5 percent), Utah (down from 60.3 percent to 58.1 percent) and Washington (down from 58.5 percent to 56.5 percent). At the other end of the spectrum, the
South had four of the five states where the equity-rich share of mortgaged homes increased the most from the fourth quarter of last year to the first quarter of this year. The largest increases were in New Mexico (up from 45.6 percent to 48.9 percent), Kentucky (up from 37.2 percent to 40.2 percent), Mississippi (up from 33.2 percent to 35 percent), Oklahoma (up from 35.2 percent to 36.4 percent) and South Carolina (up from 48.9 percent to 49.7 percent).
Largest increases in seriously underwater mortgages concentrated in Northeast
The portion of mortgaged homes considered seriously underwater remained largely unchanged – and historically low – during the first quarter of 2023 in most of the nation, with the biggest increases clustered in the Northeast. States leading those increases included South Dakota (share of mortgaged homes that were seriously underwater up from 4.3 percent in the fourth quarter of 2022 to 4.8 percent in the first quarter of 2023), Pennsylvania (up from 4.4 percent to 4.7 percent), Maine (up from 2.2 percent to 2.5 percent), Vermont (up from 0.9 percent to 1.1 percent) and Idaho (up from 2.2 percent to 2.4 percent). States where the percentage of seriously underwater homes decreased the most from the fourth quarter of 2022 to the first quarter of this year were led by Mississippi (down from 6.8 percent to 5.6 percent), Missouri (down from 7.1 percent to 6.4 percent), Kansas (down from 4.3 percent to 3.7 percent), Louisiana (down from 10.6
PLEASE SEE HOME EQUITY ON PAGE 3
“The affordable housing crisis continues to burden the most vulnerable members of our communities and the organizations committed to supporting them.” Paige Carlson-Heim, TD Charitable Foundation.
Story, page 4