The Small Balance Intersection Update - August 4, 2024

Quote Of The Day: Sunday is the day of the week when I am most likely to take the road less traveled.”

Robert Frost

Equity Lane

U.S. Homeowner Equity Surges Amidst Rising Property Values

ATTOM's Q2 2024 U.S. Home Equity & Underwater Report highlights significant gains in the equity levels of mortgaged residential properties across the United States. As of the second quarter of 2024, nearly half (49.2%) of these properties are considered equity-rich, meaning their combined loan balances are no more than 50% of their estimated market values. This figure represents a notable increase from 45.8% in Q1 2024, marking a reversal of a three-quarter decline and matching the high from Q2 2023. The surge in equity-rich properties is largely driven by a 9% quarterly rise in the national median home price, which reached a record $365,000 during the spring buying season.

Regionally, the Northeast and West continue to dominate the list of states with the highest percentages of equity-rich properties. Vermont leads the nation with 83.5% of its mortgaged homes in equity-rich status, followed by Maine (61.5%), New Hampshire (61.1%), Montana (61.1%), and Rhode Island (60.2%).

The report also identifies the top 10 U.S. housing markets with the largest annual increases in equity-rich properties among metro areas with populations over 500,000. Rochester, NY tops the list with a 10.9% year-over-year increase, bringing its total equity-rich percentage to 56.1%. Other notable markets include Syracuse, NY (up 7.9% to 49.7%), and Scranton-Wilkes-Barre-Hazleton, PA (up 7.8% to 45.5%).

Read the full article here.

Renters' Row

America's Renter Population Surges Amid Rising Homebuying Costs

The U.S. is witnessing a significant shift towards renting, with the renter population growing at three times the rate of homeowners in Q2 2024. The number of renter households increased by 1.9% year-over-year to 45.2 million, while homeowner households grew by just 0.6% to 86.3 million. This trend is fueled by the rising costs of homeownership, with mortgage payments up 90% since before the pandemic compared to a 23% rise in asking rents. Although rental costs are also high, the increased construction of apartments has helped moderate rent growth. Los Angeles, San Diego, and New York lead the nation in renter household shares, while Worcester, MA, and North Port, FL have the lowest. The rapid growth in renter households has been facilitated by a multifamily building spree, with construction completions at historic highs. However, a recent slowdown in building permits and starts could drive rents up in the future. Despite the growing renter population, many still struggle to find affordable housing, and nearly two in five renters doubt they will ever own a home.

Read the full Redfin article here.

Small Business Drive

SBA's Strategic Moves to Ease Small Business Financing

The article from Scotsman Guide discusses the recent improvements made by the U.S. Small Business Administration (SBA) to its loan programs, which are crucial for small businesses. The SBA has introduced a simplified and more efficient process for its 7(a) and 504 loan programs, reducing the complexity and time involved in obtaining financing. These changes include a more user-friendly application process, relaxed credit requirements, and reduced fees for loans under $500,000. Additionally, the SBA has invested in modern technology infrastructure to further streamline the lending process and minimize bureaucratic delays.

These updates are aimed at helping small businesses secure essential capital with fewer obstacles. The changes reflect the SBA's ongoing commitment to making its loan programs more accessible and supportive of small business growth. By reducing red tape and improving efficiency, the SBA hopes to provide a more reliable and faster source of funding, particularly for businesses that may struggle with traditional lending options. This move is expected to positively impact small businesses by allowing them to access much-needed financial resources with greater ease.

Read more here.