by Mike Colpitts 
- Nearly half of homeowners in the U.S. are equity rich, including tens of thousands of homeowners in the Fort Myers area.
- One in five homeowners saw their home values jump 20% or more in the past five years.
- Owning a home has been one of the fastest ways to develop wealth.
Nearly half of homeowners in the U.S. are equity rich, with millions of those being in Florida. Almost 50% have half of ownership equity, according to a new study by real estate data researcher ATTOM. The real estate boom produced a mammoth jump in real estate rich homeowners, increasing the margin of homeowners with equity.
One in five mortgaged homes in the U.S. saw their equity jump 20% or more in the past five years. In 2020 just 27.5% of homes had reached equity rich status, which is realized at 50% equity of market value. Equity rich is an industry term used by real estate analysts and mortgage professionals. To consider a home equity rich, you need to have an equity stake of 50% or more in your home.
Owning a home has long been considered one of the best ways to building wealth. U.S. homeowners median net worth is about $396,500. However, the study did not address the recent decline in
values since home prices started declining in many areas of the country.
However, not all homeowners are equally equity wealthy. Some own more of their home than they owe on it. Nearly half of mortgaged residential properties in the U.S. fall in the equity-rich category – close to double what they were just five years ago, according to an analysis by ATTOM.
There are two ways to accumulate home equity: Property mortgage debt decreases or your property value increases. The surge in equity rich properties isn’t due to homeowners prepaying their mortgage principal faster. It was produced by a rapidly appreciating real estate market that was fed by record low mortgage rates.
However, being equity rich can be a bit deceiving. Consider a homeowner who has amassed a $1 million equity stake in their home. It’s only a paper amount until the home is sold. “A typical homeowner with $1,000,000 in gain, even if sold as a married couple, would result in a cost of sale of close to $200,000 considering expenses for home preparation, marketing, sales commissions, and capital gains tax,” said Sebastian Frey, a San Francisco Bay area broker.
The trend can also be traced to the pandemic’s impact on residential real estate, which was experienced strongly in the Fort Myers area as home buyers targeted the area for their remote jobs. Home prices and values rose at a record fast rate between 2020 and 2022, quicker than mortgage debt. The median price of a home in the U.S. increased from $317,100 in the second quarter of 2020 to $410,800 in June 2024, according to data from the U.S. Census Bureau.
As a result, home equity stakes have risen to unprecedented amounts. Total home equity in mortgaged properties is $17.8 Trillion, according to data analyst ICE Mortgage Technology.
Between 2020 and 2025, the average mortgage-holding homeowner enjoyed an equity increase of 142%.
The biggest upside to being equity rich is a stronger financial profile and higher net worth. A home that’s worth more make homeowners feel better about their financial stability and way of life. If homeowners sold their home tomorrow, homeowners would be able to pocket more of the profits.
If your home is worth more, owning it will, however, cost more. As home values rose, so have homeownership costs – everything from property taxes, insurance premiums to maintenance expenses. Not surprisingly, states with the highest home prices tend to have the highest homeownership costs.
Home values change often, and with the declining housing market prices in the Fort Myers region, that means so does equity. Being equity-rich doesn’t mean staying equity-rich – especially if serious deflation occurs. It happened in past downward cycles and in many areas it’s occurring again.
Thinking about selling your home? Contact Mike Colpitts.