There’s plenty to be concerned about with today’s economy — overwhelmingly high inflation, the potential for a recession and continued uncertainties about what’s next in the pandemic. If you own a home, however, there’s at least one silver lining.

The housing market has enjoyed a steady run-up over the past two years, and close to half of homeowners with mortgages are now considered “equity-rich,” according to a recent report by ATTOM. A home is considered equity-rich if the mortgage on the property is equal to half or less of its estimated market value.

Top home equity-rich states

The West is the best if you’re looking for a place where homeowners accumulated more equity — although Vermont manages to keep the East Coast in the conversation. The top home equity-rich states, according to ATTOM, are:

  1. Vermont: 71.4 percent
  2. Idaho: 69.5 percent
  3. Arizona: 64.8 percent
  4. Utah: 64.3 percent
  5. Washington: 63.2 percent

That’s great news if you already own a home in one of these places — many homeowners are now tapping their equity — but it spells trouble for anyone who wants to buy now. As home values have skyrocketed, younger first-time homebuyers are encountering serious challenges in their goal to stop renting.

Top home equity-rich cities

Thirty-nine of the top 40 equity-rich cities ATTOM identified were spread across the South and West. The top five in the second quarter were:

  1. Austin: 76.5 percent
  2. San Jose, California: 75.1 percent
  3. San Francisco: 70.5 percent
  4. Sarasota-Bradenton, Florida: 70.4 percent
  5. Boise, Idaho: 69.7 percent

States with biggest equity gains

Between the first and second quarters of 2022, some homeowners saw some particularly large jumps in their ownership share:

  1. Wyoming
  2. Maine
  3. Florida
  4. Mississippi
  5. South Carolina

Top states for negative equity

The hot housing market hasn’t helped everyone. Some homeowners remain seriously underwater on their mortgages, meaning they owe more than their home is actually worth. By ATTOM’s definition, to be considered “seriously” underwater, the balance on the mortgage has to to be at least 25 percent higher than the home’s estimated market value

As of the second quarter of this year, the South and the Midwest were home to the biggest troubles for homeowners:

  1. Louisiana: 11 percent
  2. Mississippi: 8.1 percent
  3. Wyoming: 7 percent
  4. Iowa: 6.8 percent
  5. Illinois: 6.5 percent

While Wyoming is still on this list, it’s important to note that the state’s surge in equity sliced this number in half from the end of 2021.

Despite the continuing surge in home equity across the U.S., a few states actually saw the number of underwater homeowners inch up between the first and second quarters of the year. In Montana, the percentage of seriously underwater homes increased from 3 percent to 3.9 percent. New Jersey and New York also saw small increases — 2.9 percent to 3 percent and 2.7 percent to 2.8 percent, respectively.

Bottom line

Thanks to increasing home values, many homeowners are sitting on a significant amount of equity. The most equity-rich states are concentrated in the West, although homeowners in some housing markets in the South are also seeing gains. If you’re looking to take advantage of your home’s equity, check out these resources: