U.S. homeowners with mortgages – which account for roughly 62% of all properties – saw home equity increase by 8% year over year in the second quarter, representing a collective gain of $1.3 trillion and an average increase of $25,000 per borrower since the second quarter of 2023, according to CoreLogic.
Total U.S. homeowner equity increased to more than $17.6 trillion.
States that saw the highest homeowner equity gains in the second quarter included Maine, California and New Jersey.
Maine led the charge for the largest average national equity gain, at $57,500, followed by California at $55,300 and New Jersey at $52,600.
States that posted annual equity losses included Texas (-$2,600), Oklahoma (-$7,700), and North Dakota (-$8,400).
“Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic,” says Selma Hepp, chief economist for CoreLogic, in a statement. “The substantial accumulation of home equity for existing homeowners has served as an important financial buffer in times of uncertainty, as some homeowners facing higher costs of homeowners’ insurance and taxes and have had to tap into their equity to prevent falling behind on their mortgages. As a result, mortgage delinquency rates have remained at historical lows despite the inflationary pressures and higher costs of almost all non-mortgage homeownership-related expenses.”
Year-over-year, the total number of mortgaged homes in negative equity decreased by 4.2%, to 1 million homes or 1.7% of all mortgaged properties.
Quarter-over-quarter, the total number of homes in negative equity decreased by 15%, to 1.1 million homes or 2.0% of all mortgaged properties.
Because home equity is affected by home price changes, borrowers with equity positions near (+/- 5%), the negative equity cutoff are most likely to move out of or into negative equity as prices change, respectively.
Looking at the first quarter of 2024 book of mortgages, if home prices increase by 5%, 105,000 homes would regain equity; if home prices decline by 5%, 139,000 properties would fall underwater, CoreLogic says.
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