Homeowners are still getting ‘equity rich’ despite the slowing market

Homeowners in South Florida are still seeing a return on their property, even as the housing market continues to cool down.

About 63% of properties with a mortgage in South Florida are considered “equity rich,” in the third quarter of this year, according to a report from ATTOM Data, a provider of nationwide property data.

It’s an uptick from the previous quarter, where about 59.8% of properties were considered “equity rich.”

“The ongoing, but relatively small, improvement in home equity during the third quarter of 2022 came as the U.S. housing market cooled considerably amid multiple forces that threaten to stifle or reverse an 11-year run of nearly uninterrupted price spikes and equity gains,” the report noted.

To find how many properties were still building equity, researchers looked at mortgaged residential properties in the area with different levels of loan-to-value ratios.

For a property to be “equity rich,” the combined estimated loan amount was no more than 50% of their estimated market value, meaning that the owner had at least 50% equity.

Here is a breakdown by county on equity rich properties in South Florida:

“Even though home price appreciation has slowed down dramatically in recent months, homeowners have continued to build equity,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “And it appears that many of those homeowners have decided to stay where they are rather than purchase a new home, and are beginning to tap into that equity.”

Home values are still on the rise in South Florida, despite the market in a state of flux. Some buyers have backed off from the market in light of record prices and high mortgage rates, leading to a slowing in the market.

Overall, prices for single-family homes are at least 20% higher than they were a year ago, and inventory levels, while rising, aren’t enough to balance out the market entirely.

According to Zillow, the average home value in South Florida is $475,300 as of September, a 28% increase from the year before.

This article is written by Amber Bonefont from Sun Sentinel and was legally licensed via the Tribune Content Agency through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.