Homes where the loan-to-value ratio is 50% or lower — equity-rich homes — are on the rise, which is good news for homeowners. According to ATTOM’s U.S. Home Equity & Underwater Report, 49% of mortgaged residential properties in the United States were considered equity-rich at the end of this year’s second quarter. That means that nearly half of U.S. homeowners are maintaining at least 50% equity.

That share is up 2% from Q1, when the portion of equity-rich, mortgaged homes reached 47% — at that point, the highest level seen in four years.

“The second-quarter market revival bestowed immediate benefits on homeowners around the nation in the form of better profits for sellers and rising equity for those staying put. Equity levels were high even during the recent downturn, and now they are going back up and better than ever,” ATTOM CEO Rob Barber said in a press release.

Thanks to rising demand and continued, tight inventory, prices for both attached and detached homes rose across the U.S during Q2, reversing the market slowdown that began in mid-2022. The quarter ended with the country’s median home at value $350,000: a 10% increase and all-time high.

However, Barber noted that the market remains in flux. “The recent improvement could easily be temporary. Lots of changing forces are at work affecting whether boom times are really back, especially amid a recent increase in mortgage rates. But with the 2023 peak buying season still underway, it seems that homeowners can reasonably expect their household balance sheets to grow a bit more in the near future.”

During Q2, home equity rose in 45 of the 50 states, with the largest increases occurring throughout the Midwest. The greatest regional gain came in Wisconsin, where the share of equity-rich homes rose 5.5% to 47.1%, followed by Michigan, with a 5.2% gain; South Dakota, with a 5% gain; and Ohio, with a 4.6% gain.

Meanwhile, the West remains the leader for equity-rich homes. Six of the top 10 equity-rich states are in the West. The top state was Vermont, where 77.5% of homes are equity-rich, followed by California (63.3%), Montana (60.9%), Florida (60.4%) and Idaho (59.4%).

At the same time, the number of seriously underwater mortgages also improved. Just 2.8% of mortgaged homes were considered seriously underwater during Q2, down from 3% the prior quarter, and marking the lowest percentage since at least 2019.

By ATTOM’s standards, any home where the loan-to-value ratio is 125% or higher is considered seriously underwater. So, as 2023 wears on, it appears that fewer property owners owe more than 25% of their property’s estimated market value.

The rate of seriously underwater homes declined in 37 states overall, and like the growth in equity-rich homes, that change was steepest in the Midwest: a region that long held some of the highest shares of underwater homes. Missouri had the biggest percentage dip in the share of seriously underwater homes, dropping 1.6% quarter over quarter to 4.8%; followed by Illinois, down 1.3% to 5.1% overall; South Dakota, down 0.8%; and Kansas and Ohio, which were both down 0.7%.

One Midwestern state, however, posted the greatest increase in seriously underwater homes: Indiana. There, the share rose 3.3% quarter over quarter to 8.1%.

Still, most homeowners facing foreclosure have at least some home equity. During Q2, 255,700 U.S. homeowners faced possible foreclosure — about one in every 250 mortgaged residential properties. And of those, ATTOM reported, 92% had at least some equity built up in their homes.