Maine homeowners continue to enjoy high rates of home equity even as the national average is flattening out, a new report showed.
The national dip in the fourth quarter of last year slid amounted to less than 1 percentage point. But it is one of the first signs of how the recent fall in prices across the country has started to affect homeowners following a decade-long boom, according to ATTOM, a real estate data company.
Prices are still high in Maine because of tight inventory. Some 57 percent of Mainers with mortgages were equity-rich in the fourth quarter of last year compared with almost 47 percent in the fourth quarter of 2021. Equity rich means the loan balance on properties is less than 50 percent of the home’s estimated market value.
The highest rate was in Knox County, where 66 percent of homeowners with mortgages were equity rich, while 41 percent were in Aroostook County, the lowest rate.
Home prices in Maine are rising at a more moderate rate, recent data from the Maine Association of Realtors showed. Nationally, they have been dropping since the middle of last year, which is starting to cut into equity around the country. What happens over the next few months depends on many factors, including rising interest rates, ATTOM said.
“For now, it looks like the runup in wealth flowing from owning homes has stalled, along with the market,” Rob Barber, ATTOM’s CEO, said.
The Portland area continues to have a high percentage of equity-rich homes, with almost 62 percent in the fourth quarter of 2022. That was up sharply from 52 percent in the first quarter.
New England counties have some of the highest share of equity-rich properties in the country, with Chittenden County (Burlington), Vermont, at almost 87 percent; Duke’s County (Martha’s Vineyard), Massachusetts, at 84 percent; and Nantucket County, Massachusetts, at almost 80 percent.
On the flip side, only 2.2 percent of homes in Maine were seriously underwater in the fourth quarter of 2022, down from 4.4 percent one year before. Seriously underwater means the owner owed at least 25 percent more than the estimated market value of the property.
Of the New England States, Vermont had the least number of homes seriously underwater at 0.9 percent, followed by Rhode Island at 1.1 percent, New Hampshire at 1.2 percent and Massachusetts at 1.3 percent.