Homeowners with mortgages saw their home equity increase by 8.0% annually during the second quarter, according to the latest Homeowner Equity Report from CoreLogic.
That represents a collective year-over-year gain of some $1.3 trillion, or roughly $25,000 per borrower on average. The increase brought total net homeowner equity nationwide to more than $17.6 trillion at the end of the second quarter.
“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.” said Selma Hepp, chief economist for CoreLogic. “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.”
Equity gains were strongest in the Northeast and in California. Homeowners in the Golden State saw $55,000 in average equity gains year over year, second only to Maine, where homeowners realized $58,000 in equity gains. Three states logged yearly equity losses: North Dakota (where the average homeowner lost $8,000 in equity), Oklahoma (-$8,000) and Texas (-$3,000).
Meanwhile, negative equity — when borrowers owe more on their mortgages than their homes are worth — continues to dwindle, with the total number of mortgaged residential properties underwater down by 4.2% quarter over quarter and 15% year over year. Approximately 960,000 properties (1.7% of all mortgaged properties) were underwater at the close of Q2. The national aggregate value of negative equity at the end of the quarter was about $318 billion, down by approximately $3.7 billion from one quarter prior and by $19.7 billion from the same quarter last year.
