According to CoreLogic’s most recent Homeowner Equity Report, U.S. homeowners with mortgages saw their equity grow by 29.3% year over year in fourth-quarter 2021, an average gain of $55,300 per borrower.

Collectively, these homeowners (whose assets account for approximately 63% of all residential properties in the U.S.), gained more than $3.2 trillion in equity on a year-over-year basis. Homeowners in Western states saw the largest equity gains by dollar value, led by those in Hawaii ($128,000 gained since Q4 2020), California ($117,000) and Washington ($95,000).

Homeowners nationwide have enjoyed an extended period of rising equity due to the ongoing growth of home prices. In Q4 2021, nationwide home prices climbed by 18% yearly, up from the 8% growth logged in Q4 2020, per CoreLogic.

“Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth,” said Frank Nothaft, the company’s chief economist. “For low- and moderate-income homeowners, home equity has historically been a major source of wealth.”

Burgeoning property prices also have helped push down the number of homeowners with negative equity (borrowers who owe more on their mortgages than their homes are currently worth). Only 1.1 million homeowners nationwide (or 2.8% of all mortgaged properties) are currently underwater, the lowest level in more than 12 years, according to CoreLogic. The number of homes with negative equity was down 3% on a quarterly basis and down 24.9% year over year.

CoreLogic’s home-price forecast could spell good news for the owners of thousands of these underwater properties. Because home-price changes affect equity, borrowers with equity positions near the negative equity cutoff are likely to move out of or into negative equity positions as prices shift.

For example, if home prices were to decline by 5%, another 183,000 homeowners would end up with underwater mortgages. But CoreLogic’s current projection calls for home prices to increase by 5% from December 2021 to December 2022, meaning that 141,000 properties would gain enough equity to no longer be considered underwater.