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Maine homeowners accrued wealth faster than those in all but one other state because of the continuing rise in home prices, a new report found.
The portion of mortgaged homes considered equity rich, where homeowners have at least 50 percent equity in the house, rose to 56.3 percent in the second quarter of this year, up from 48.5 percent in the first three months, a report released Thursday by real estate data tracking firm ATTOM Data Solutions found.
The numbers reflect the upside of the hot real estate market in Maine, where prices continued to rise to a median of $360,825 in June, up more than 16 percent from the prior year despite fewer homes for sale, according to the Maine Association of Realtors.
The trend is most pronounced in Cumberland County, where Greater Portland led the Northeast region with 62.6 percent of equity-rich homes, up from 52.1 percent in the first quarter. Aroostook was lowest among Maine counties at 34 percent, but it was still up from 25.4 percent over the previous period.
Maine beat the national average of 48 percent, up from 45 percent in the second quarter. The state’s gain between the first and second quarters of this year was higher than every other state except for Wyoming.
“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,” Rich Sharga, executive vice president at ATTOM, said.
ATTOM derived its data from public mortgage and deed trust data from more than 155 million properties nationwide.
Sharga said the equity-rich home percentage is at a record high, while the percentage of homes seriously underwater with a loan balance higher than the property’s fair market value, is at its lowest. It’s a much lower amount than the 3o percent of Americans who owed more than their home was worth during the housing bubble in the early 2000s.
In Maine, the percentage of home mortgages that are seriously underwater declined to 2.2 percent of the 264,651 outstanding mortgages in the second quarter compared with 3.1 percent in the first three months of this year. In Greater Portland, the rate dropped to 1.1 percent from 1.7 percent.
Even homeowners facing foreclosure have home equity that could help them sort through their financial problems, Sharga said. Some 214,800 U.S. homeowners faced foreclosure during the second quarter, but 91 percent of them had some equity built up in their homes.
“These homeowners have the opportunity to leverage this equity to either secure short-term financing to resolve their delinquencies, or to sell their properties at a profit and avoid a foreclosure auction,” he said.