Thanks to rising home prices. hardly any homeowners find themselves underwater on their mortgages and the few that do are concentrated in a few cities and towns. In fact, ATTOM says that more than one-third of mortgaged homes in the country are considered "equity rich" with a combined loan-to-value (CLTV) ratio below 50 percent. The 34.4 percent of homeowners in that category is up from 31.2 percent the previous quarter and 27.5 percent in the second quarter of 2020.

The company, in its second quarter U.S. Home Equity and Underwater Report, shows only 4.1 percent of mortgaged homes, or one in 24, were considered seriously underwater in the second quarter of 2021. Those homes had a CLTV at least 25 percent more than the property's estimated market value. That was down from 5.2 percent of all U.S. properties with a mortgage in the prior quarter and 6.2 percent, or one in 16 properties, a year ago.

Forty-eight states saw the number of equity-rich homes increase and the seriously underwater decline from the first to the second quarters. All 50 had such an increase compared to a year earlier.  Equity increases in the second quarter came as the median home prices nationwide rose 11 percent, quarterly, and 22 percent on an annual basis in the second quarter.

"The huge home-price jumps over the past year that helped millions of sellers earn big profits also kicked in big-time during the second quarter for other owners who saw their typical equity improve more than at any time in the last two years," said Todd Teta, chief product officer with ATTOM. "Instead of the virus pandemic harming homeowners, it's helped create conditions that have boosted the balance sheets of households all across the country. There are still a lot of questions hanging over the near future of the U.S. housing market, with some connected to how well the economy keeps recovering from the pandemic, and some not. We'll keep watching those closely, though for now, there are few assets that keep on giving so much as homeownership."

Nine of the top 10 states in terms of growth in equity-rich homes were in the West and Northeast. In Arizona that share jumped from 16.3 percent in the first quarter to 39.7 percent in the second. In each of three neighboring New England states the gain was about 16 percentage points quarter-over-quarter. Massachusetts, New Hampshire, and Rhode Island all ended quarter two with just over 41 percent of their mortgaged homes in the equity-rich category.

The smallest gains, and in some cases losses in the share of equity-rich homes were posted in Maryland (down from 23.5 percent to 23.2 percent), West Virginia (unchanged at 19.8 percent), Nebraska (flat at 27.1 percent), Alaska and Montana, each up less than 1 point to 22.9 and 40.8 percent respectively

The decline in the share of underwater homes was greatest in Tennessee, Alabama, and Delaware, each of which declined by about 6 points into the single digits, while the share increased the most in West Virginia, from 10.3 percent to 11.7 percent. There were also small increases in New Hampshire, Hawaii, New York, and Utah, but all remained below a 5 percent share.

Equity-rich properties were most predominant in the West, with Idaho, California leading with over 50 percent, although Vermont was also above that mark. The shares were lowest in the Midwest and South which also led in the percentage of underwater properties.

All but one of the 106 metro areas analyzed (99 percent) showed an increase in levels of equity-rich homes from the first quarter of 2021 to the second quarter of 2021 while all 106 improved year-over- year. The greatest concentration of high equity properties was in the San Francisco Bay area of California.

When it comes to those concentrations of underwater homeowners we mentioned at the start of this piece, no one can top Ohio. ATTOM says there were 33 counties in the U.S. where at least 25 percent of properties were seriously underwater. The largest number of those zip codes were in Cleveland, Akron, and Toledo.