Study: 54 percent of New Hampshire homeowners are ‘equity-rich’

In a new measure of home value, New Hampshire ranks 15th among states with homeowners who are considered “equity-rich.”

According to a state-by-state analysis of mortgages in the second quarter of 2022, 54 percent of Granite State homeowners were “equity-rich” in comparing the value of their property to the balance on their loan. While the Granite State was 15th on that list, neighbor Vermont was No. 1, at 71.4 percent, followed by Idaho at 69.5 percent, Arizona at 64.8 percent, Utah at 64.3 percent, and Washington at 63.2 percent.

In all, according to the report from ATTOM, a curator of real estate data, 48.1 percent of mortgaged residential properties in the United States were considered equity-rich in the second quarter. It defines equity rich this way: The estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.

ATTOM also cited data showing the number of homes “seriously underwater” was on the decline in the second quarter. Only 1.5 percent of New Hampshire homes were underwater, meaning that the homeowner owes more on the mortgage than the property is worth.

“After 124 consecutive months of home price increases, it’s no surprise that the percentage of equity-rich homes is the highest we’ve ever seen, and that the percentage of seriously underwater loans is the lowest,” said Rick Sharga, executive vice president of market intelligence at ATTOM.

He added that, “while home price appreciation appears to be slowing down due to higher interest rates on mortgage loans, it seems likely that homeowners will continue to build on the record amount of equity they have for the rest of 2022.”

Home values have risen on the strength of a real estate market that has favored sellers for several years now.

Lack of inventory, historically low interest rates and enthusiastic buyers – unbowed by high asking prices – have put upward pressure on the value of a home.

That is especially true in New Hampshire, which, for two months this year in May and June, saw median home prices reach a record level of $460,000.

The median price of a home tapered off to $450,000 in July, according to the latest monthly report from the NH Association of Realtors, up 11.1 percent from July 2021.

So is a cooling-off period ahead for a market that’s been red hot for a few years now?

Adam Gaudet, president of the Realtors Association, said more inventory is providing a little bit of breathing room for buyers when it comes to prices.

“More inventory has resulted in more competitive pricing by sellers and less way over-asking offers from buyers. I have multiple buyers currently under agreement for under-asking, which was not possible just five months ago,” said Gaudet, owner/broker of 603 Birch Realty in Concord. “Accurately priced homes are still selling at list price or slightly above, but there have been some price reductions on properties that were asking too much,” he added. “The shift has also brought back home inspections, we’re seeing more buyers asking for them and more sellers accepting those offers.”

Another Realtor, John Rice, a broker with Tate & Foss Sotheby’s International Realty in Rye said, “We are seeing signs of price moderation, especially in the high end where days on market is longer than a few months ago. The median price of a single-family home was off 7.9 percent from a year ago last month, the first time in six months that the median has been less than what it was a year ago.”

He credited the shift to “a function of very slightly increased inventory, especially in homes priced higher than $600,000, and less demand, probably a function of doubled interest rates and other uncertain economic indices.”

‘Equity-rich’ and ‘underwater’ details

The ATTOM report said that as of the end of the second quarter there were 283,680 outstanding mortgages in New Hampshire. Of those mortgagees, 54 percent were considered equity-rich, while 1.2 percent were considered underwater.

During the same period in 2021, 36.1 percent were equity rich while 2.5 percent were underwater, indicating an increase in overall value to debt over the course of a year.

Here is a breakdown by county that shows, as of the second quarter, the number of mortgages, the percentage underwater, and the percentage equity rich:

• Belknap 17,194 mortgages, 1.3 percent underwater, 63.9 percent equity rich
• Carroll 15,345 mortgages, 1.0 percent underwater, 69.9 percent equity rich
• Cheshire 11,100 mortgages, 1.9 percent underwater, 49.7 percent equity rich
• Coos 6,064 mortgages, 2.2 percent underwater, 59.4 percent equity rich
• Grafton 16,831 mortgages, 1.6 percent underwater, 59.4 percent equity rich
• Hillsborough 91,187 mortgages, 1.0 percent underwater, 50.0 percent equity rich
• Merrimack 29,497 mortgages, 1.4 percent underwater, 50.5 percent equity rich
• Rockingham 66,085 mortgages, 1.1 percent underwater, 54.2 percent equity rich
• Strafford 21,692 mortgages, 1.5 percent underwater, 51.9 percent equity rich
• Sullivan 8,685 mortgages, 1.4 percent underwater, 57.0 percent equity rich.

Nationwide, Louisiana, at 11.0 percent, had the most homes underwater, followed by Mississippi at 8.1 percent, Wyoming at 7.0 percent, Iowa at 6.8 percent, and Illinois at 6.5 percent. And the state with the fewest homes underwater? Vermont, 1.0 percent.