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By Julie Gerstein on Realtor.com
Vermont might be among the smallest states in the country, but it also happens to have the most equity-rich homeowners, according to a new report.
At least 86.7% of the New England state’s homeowners fall into this category, according to the 2024 U.S. Home Equity & Underwater Report by real estate analytics company ATTOM. To be equity-rich, it means that the remaining balance on a mortgage is 50% or less than the market value of the home.
In the Vermont county of Chittenden, where the median listing price is $576,600, a staggering 91.7% of homeowners are considered equity-rich.
Other states with the most equity-rich homes include New Hampshire (61.4%), Maine (61.1%), Rhode Island (60.8%), and Montana (60.1%).
Meanwhile, the states with the lowest number of equity-rich homes were Louisiana (22.4%), Alaska (31.5%), North Dakota (32.4%), Maryland (32.6%), and Illinois (33%).
Several cities are also considered equity-rich, many of which can be found in California. At least 68.5% of homes in San Jose—with a median home list price of $1.18 million—are equity-rich. In Los Angeles, where the average home list price is $1.2 million, 64% of homes are equity-rich. In San Diego, where the median list price is $949,950, 63.4% of homes are equity-rich.
Overall, the report found, 47.7% of mortgaged homes in the U.S. are considered equity-rich. That’s a slight decline from earlier in the year when the percentage of equity-rich homes peaked at 49.2%. But the good news: Overall, 41 states saw an increase in home equity between Q4 2023 and Q4 2024.
“Nearly half of all residential mortgage payers in the U.S. have paid off at least half of their loans, leaving many with six-figure levels of wealth available to leverage anything from new home purchases to starting new businesses to paying off major expenses,” said ATTOM CEO Rob Barber in a statement.
Why being equity-rich matters
Equity-rich homeowners have a particular advantage because they can leverage the ratio of mortgage to the market value of their homes, allowing them to trade up to more expensive properties or take advantage of a home equity line of credit, or HELOC.
Many would-be homeowners with equity-rich homes have stayed out of the market, though, as interest rates continue to bump up to near 7%, and because more expensive homes don’t necessarily equate to bigger or better homes. Since 2019, the median home list price has increased by 38.4% while the average price per square foot of a home has increased 54.9%.
Around 50% of homeowners have an interest rate below 4% and are loath to trade it in for the current 6.8% rate, contributing to a “lock-in” effect, where homeowners are constrained by such “golden handcuffs.”
That might be why so many homeowners have instead opted for HELOCs. According to a report from the Federal Reserve Bank of New York, the balances on HELOCs have increased 20% since 2021.
Homeowners with equity-rich homes can also use that equity to consolidate debt by taking out a home equity loan against their property. A recent report from real estate analytics company CoreLogic found that the amount of home equity lending increased to its highest levels since 2008.
According to Selma Hepp, the chief economist of CoreLogic, the amount of home equity has increased by $129,000 since the onset of the COVID-19 pandemic, to $315,000.
That has served as a “financial buffer,” helping homeowners avoid defaulting on their mortgages, she said in a statement.
“Mortgage delinquency rates have remained at historical lows despite the inflationary pressures and higher costs of almost all non-mortgage, homeownership-related expenses,” she said.
Some homeowners are using their extra equity to refinance or negotiate a lower monthly payment or interest rate (for homeowners who bought when interest rates were high).
Despite current relatively high interest rates, some homeowners are eager enough to move that they’re willing to take on a higher interest rate burden.
“Even in today’s high-price, high-rate market, homebuying activity around big life events—like kids, marriage, and divorce—keeps the market in motion,” Realtor.com senior economic research analyst Hannah Jones previously said.
Julie Gerstein is a writer and editor based in Philadelphia. She previously worked at Business Insider as an executive editor covering news, entertainment, and digital culture, and was the company’s founding Singapore bureau chief. She was also a senior editor at BuzzFeed, covering lifestyle, fashion, and beauty. She earned a B.A. in women’s studies from the University of Pennsylvania and an M.A. in media and cultural studies from the University of Sussex.
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Categories: Housing
Equity rich ? So does that make my fuel oil cheaper ? does that make my food more affordable ? How about lumber to do those equity building improvements ? So what good is itto be equity rich ? Oh I get it, it makes it easier to get loans so you can get your self in deeper dog doo ! I’m such a lucky guy !
The state is equity rich with the ability to tax you more for that inflation driven value.
It is because the VT economy is in a perpetual state of blah, particularly outside of Chittenden Co.
As a result, people stay in the jobs longer than average and thus stay in their house longer as well.
All these states listed as “equity rich” are those where house prices are greatly overinflated. There are no riches, it’s all smoke and mirrors.
Realtor.com putting lipstick on a pig – very telling piece considering mutliple lawsuits in multiple states putting their industry in the spotlight for collusion, racketeering, and consumer fraud. In Texas, a lawsuit filed detailing school supervisory districts, lenders, property appraisers, and real estate agents colluding to inflate prices, inflate grand lists, higher taxes for schools, and the consumer losses all away around.
February 23, 2024 Las Vegas Review-Journal: “The end of the evil real estate empire’: Lawsuit targets artificially inflated fees”
March 15, 2024: New York Post: “The National Association of Realtors on Friday agreed to a landmark settlement over claims that it conspired to inflate agent commissions – a deal that will likely lower costs and upend how Americans buy and sell homes.
The powerful lobbying group will pay $418 million in the nationwide antitrust suit, which also calls for the NAR to eliminate decades-old rules on commissions and make it easier for buyers to negotiate fees with their own agents or use no agents at all.
The NAR also agreed to do away with longstanding practice that required home-sale listings to include an upfront offer which set agent fees.”
December 11, 2024 CoreLogic: “Thirty-eight states saw overall mortgage delinquency rates increase year over year in September. The two states with the highest delinquency rates were Louisiana (up 0.6 percentage points) and Texas (up 0.4 percentage points). All other states ranged between -0.4 and 0.3 percentage points.
In September, 267 out of 384 U.S. metropolitan areas posted an annual increase in their overall delinquency rate. Top areas include Pine Bluff, Arkansas (up 1.1 percentage points); Houston-The Woodlands-Sugar Land, Texas (up 1.0 percentage points); New Orleans-Metairie, Louisiana (up 0.8 percentage points); Altoona, Pennsylvania (up 0.8 percentage points); Hammond, Louisiana (up 0.8 percentage points); and Houma-Thibodaux, Louisiana (up 0.8 percentage points). All other year-over-year changes ranged between -2.8 and 0.7 percentage points.
In September, 116 metropolitan areas posted an annual increase in their serious delinquency rate. The top areas include Kahului-Wailuku-Lahaina, Hawaii (up 0.8 percentage points); Houston-The Woodlands-Sugar Land, Texas (up 0.6 percentage points); and Beaumont-Port Arthur, Texas (up 0.4 percentage points). All other year-over-year changes ranged between -0.4 and 0.3 percentage points.
The nation’s overall delinquency increased on a year-over-year basis for the fourth consecutive month.”
Do not be deceived – sound advice these days!
I don’t buy it. You can’t just set prices of things artificially. If any colluding brought the advertised price up higher than it otherwise would be, as long as individuals are agreeing to the purchase voluntarily, all they are doing is reducing the dead weight loss portion of the pricing triangle. The laws of supply and demand must always be true, even if people are foolishly believing fake signals and using them to make poor purchasing decisions.
Plausible deniability? The root of all fraud. When court documents show cause, cite the law, and discovery prompts receipts. The DOJ obviously found cause to file and damages awarded wasn’t based on an illusion. The Texas case has legs, and the Texas Legislature is taking notice. Are we a Constitutional Republic or not? Seems with everything being exposed, we are not.
I’m not arguing that there aren’t laws on the books. My argument is that the laws of supply and demand are always true. The government laws are created with the fallacy that prices can be “controlled”. Sellers should be free to sell whatever they want at whatever prices they want, and buyers should be free to buy at whatever prices they accept. If we had a constitutional money and markets, these government laws would be outside of the scope of their authority. It’s a false sense of security, and lawsuits will do nothing to fix anything.
If a potato chip company wants to collude with a competing company to raise their prices, this will give another potato chip company that doesn’t exist yet, the incentive to start producing chips at a better price, and the market will correct. Collusion on pricing will only work up to the point of diminishing returns. If this wasn’t true, you could set the price to a million dollars a bag. If the prices can go higher without diminishing returns, then the price is optimized better than it was before. Overall, this is a market effect like savings, which brings more options to the market in the future that wouldn’t otherwise exist, thus better for society, and increases wealth overall.
Translation: Equity rich means that Vermont is inequitable compared to other states, which may not have an aging population that benefits from the “golden handcuffs” and/or remaining in a home over a long period of time this gaining equity. I see this article as a precursor to what will come as progressives demand that outcomes be made equitable. The only question to ask is how will they correct this “unnatural” inequitable outcome.
Wait, I thought it was the rich evil Republican oligopoly that threatened America? This is consistent with the fact that the majority of ultra-wealthy Americans are liberals, not conservatives (70% per RFK Jr. I believe). Not all of Chittendon residents are lefties, of course — just most of them, and this state. Being equity-rich means they can afford the high taxes they seed because they don’t have mortgages to pay. Vermont has become extremely regressive in tax structures under pseudo-progressive rule: doesn’t hurt the rich. Thomas Frank called liberals the party of Martha’s Vineyard elites in 2017, claiming they had left the working class behind. He was dead on, but ignored by elites who believe they are superior to the little people because they have money and degrees. That’s why the Left keeps howling about moral superiority over trans, race, climate, and illegals while pummeling working-class Vermonters deeper into “equity-poor” circumstances.
Vermont is not as easy to survive in or enjoy as it was in the era around the early ’70’s. As the democrats gained power, Vermont became less fun and affordable. I have avoided the urge to move south hoping things might change. But never say never. BTW, I just returned from another vacation in Louisiana. I saw a lot of beautiful houses, lots of land, and some of the nicest and friendliest people.