Due to rising home prices, most U.S. homeowners have seen their equity increase during the past year.
However, home price appreciation has been slowing, which means they are not building equity as quickly as they were compared with two quarters ago, recent data from CoreLogic shows.
In total, U.S. homeowners with mortgages – which account for roughly 63% of all properties – have seen their equity increase by 9.4% or nearly $775.2 billion since the third quarter of 2017, according to the firm’s Home Equity Report.
As a result of this significant increase in equity, the number of homes in negative equity continues to shrink.
As of the end of the third quarter, about 2.2 million homes – or 4.1% of all mortgaged properties – were in negative equity, according to the report.
That’s a decrease of 4% compared with the end of the second quarter and a decrease of 16% compared with November 2017.
However, that’s the smallest quarter-to-quarter decrease since the economic recovery began in 2010, CoreLogic says.
“On average, homeowners saw their home equity increase again this quarter but not nearly as much as in previous quarters,” says Frank Nothaft, chief economist forCoreLogic. “During the third quarter, homeowners gained an average of $12,400 compared to the second quarter when the average home equity wealth increase was more than $16,000. This lower year-over-year gain reflects the slowing in appreciation we’ve seen in the CoreLogic Home Price Index.”