More than half of Arizona homes are "equity rich"

More than half of Arizona homes are considered "equity rich," meaning the owner holds at least 50% equity, according to real estate data firm Attom .

Why it matters: Home equity is an important tool many Americans use to build wealth and finance big expenses, from business startups to their next home.

• Arizona's rate of equity-rich homes is significantly higher than the national average of 44%.

The big picture: People who purchased in the Valley before prices spiked during the pandemic likely paid much less than their home is currently worth, meaning they are sitting on a nice chunk of equity.

• "Homeowner balance sheets continue to benefit in a huge way from the boom times," Attom CEO Rob Barber said in a statement.

Between the lines: Often, people only see their equity when they sell their home. But with high home prices and high interest rates making moving unappealing, there are other ways to tap into equity without selling your house, finance experts say.

Zoom in: Home equity loans, which are second mortgages secured against your equity, generally have lower interest rates than credit cards, according to NerdWallet.

• They also typically allow you to take out up to 80% of your equity — likely more than your credit card spending limit.
• "You can spend it as you wish, but it's safest to use it on expenses that will help grow your wealth. For example, you may get a home equity loan to finance a home improvement project," per NerdWallet .

The intrigue: Although most of the country has strong home equity rates, the Attom report found the portion of mortgaged homes that were "seriously underwater" (where loan balances are at least 25% more than estimated market value of the home) in the U.S. ticked up during the first few months of this year, from 2.6% to 2.7%.

• Arizona's rate of seriously underwater homes was 1.6% — down from 1.9% at the end of last year.

Reality check: If you own one of the nearly 25,000 seriously underwater homes in the state, don't panic, National Association of Realtors chief economist Lawrence Yun tells us.

• The market ebbs and flows, and your being underwater could be temporary.

Yes, but: If the labor market or economy takes a turn, underwater homeowners are more at risk.