Majority of Nevadans with mortgages are equity rich

By: - May 17, 2022 5:41 am

“Sellers say ‘let’s go for the cash offer because we don’t have to worry about the appraisal’… People who need a mortgage are out of the market.” (Getty Images)

More than half of Nevada homeowners with mortgages are considered “equity rich” according to real estate data analyst ATTOM, meaning they owe less than 50% of their property’s market value. 

Some 625,164 residential properties in Nevada have mortgages. Of those 331,768 or 53.1%, are equity rich, up from 49.8% in the last quarter of 2021. 

Statewide, 7,748 properties secured by mortgages, or 1.2%, are seriously underwater, meaning the amount owed exceeds market value by more than 25%. 

Equity increases as property owners pay down their mortgage principal. For most people, it’s a key factor in accumulating wealth. But it can also plummet when housing prices decrease, as it did during and after the Great Recession.  

Negative equity peaked nationwide in the fourth quarter of 2009, when CoreLogic reported 26% of properties were underwater. By March of 2013, 52% of Nevada properties were worth less than their mortgages.

Nationally, 44.9% of residential properties with a loan were considered equity-rich in the first quarter of this year. That’s up from 41.9% in the fourth quarter of 2021 and 31.9 percent from the first quarter of 2021. 

“Homeowners continue to benefit from rising home prices,” Rick Sharga, executive vice president of market intelligence for ATTOM, said in a news release.

In Southern Nevada, the median price of a single family home in April was $475,000, up 26.7% from a year ago when the median price was $375,000, according to Las Vegas Realtors. Sales last month were down 14.9% from April 2021. 

“Of course, price appreciation over the next year is not expected to be at the same level as the previous two years but still robust given historic appreciation rates associated with residential real estate,” says Dr. Vivek Sah of UNLV’s Lied Real Estate Institute.

“I feel given the strong local economy and robust growth post the pandemic slump we have seen in Southern Nevada, prices are likely to sustain despite rising interest rates. Some new construction supply may catch-up but that won’t impact the prices as much.”

Top five “equity rich” states 

Idaho        68.8%

Vermont    68 %

Utah          63.6%

Arizona     60.9%

California  60.5%

Top five “seriously underwater” states

Mississippi  17%

Louisiana    11.3%

Wyoming      10%

Iowa              7.4%

Illinois           7.2%

Washoe County’s median price in April was $595,000, up 3.5 percent from a year ago. Sales decreased by 3.2 percent from last year, according to the Reno Sparks Association of Realtors..

“Record levels of home equity provide financial security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008. But these higher home prices and rising interest rates make it extremely challenging for first time buyers to enter the market,” said Sharga.

Market analysts are “generally predicting a slowdown” this year, according to ATTOM. 

Southern Nevada, with a population of 2.265 million according to the report, has 464,622 mortgages.  239,341 or 51.5 percent are equity rich. That’s up from 47.1% in the last quarter of 2021.  About 1% of homes in Southern Nevada are seriously underwater.  

Washoe County has 102,964 outstanding mortgages.  Of those 63,501 homes (61.7%) are equity rich and 1.1% are seriously underwater.

In Elko, which has 7,322 outstanding mortgages, 5.2% are seriously underwater, the highest percentage in the state. 

Equity-rich status increased from the fourth quarter of 2021 in 45 states, while seriously underwater designations increased in 28 states, but generally by less than one percent, according to ATTOM.  

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Dana Gentry
Dana Gentry

Dana Gentry is a native Las Vegan and award-winning investigative journalist. She is a graduate of Bishop Gorman High School and holds a Bachelor's degree in Communications from the University of Nevada, Las Vegas. Gentry began her career in broadcasting as an intern at Channel 8, KLAS-TV. She later became a reporter at Channel 8, working with Las Vegas TV news legends Bob Stoldal and the late Ned Day. Gentry left her reporting job in 1985 to focus on motherhood. She returned to TV news in 2001 to launch "Face to Face with Jon Ralston" and the weekly business programs In Business Las Vegas and Vegas Inc, which she co-anchored with Jeff Gillan. Dana has four adult children, two grandsons, three dogs, three cats and a cockatoo named Casper.