Due to rising home prices, U.S. homeowners with a mortgage gained an average of $28,000 in equity during the past year, according to CoreLogic.
That’s the largest yearly gain since late 2022.
States that saw the highest average annual equity gains, as of the end of the first quarter, included California ($64,000), Massachusetts ($61,000) and New Jersey ($59,000).
Among the major U.S. cities, Los Angeles saw the highest year-over-year home equity growth, at $72,000.
On average, U.S. homeowners with mortgages (which account for roughly 62% of all properties) saw home equity increase by 9.6% year over year, representing a collective gain of $1.5 trillion.
As of the end of the first quarter, total net homeowner equity was more than $17 trillion.
“With home prices continuing to reach new highs, owners are also seeing their equity approach the historic peaks of 2023, close to a total of $305,000 per owner,” says Selma Hepp, chief economist for CoreLogic. “Importantly, higher prices have also lifted some 190,000 homeowners out of negative equity, leaving only about 1.8 percent of those with mortgages underwater.
“Home equity is key to mortgage holders who have seen other homeownership costs soar, including insurance, taxes and HOA fees, as a source of financial buffer.” Hepp adds. “Also, low amounts of negative equity are welcomed in markets that have shown price weaknesses this spring, such as Florida (1.1% of homes underwater) and Texas (1.7% of homes underwater) — both of which are below the national rate — as further price declines could drive more homeowners to lose their equity.”
Photo: Tierra Mallorca