Home equity gains continue to surge across U.S.

It remains a good time to be a homeowner as U.S. home equity hit a new high in third-quarter 2019, according to data analytics company CoreLogic.

Year over year, the aggregated amount of equity held by homeowners with mortgages grew by $457 billion in the third quarter. That’s an annual increase of 5.1%. Since the end of 2011 — when equity stopped declining after the housing crash — homeowners have gained a total of $6 trillion in equity.

The average homeowner gained about $5,300 in equity from third-quarter 2018 through third-quarter 2019. Homeowners in some states fared even better. In Idaho, for example, the average year-over-year increase was $25,800, while in Wyoming, it was about $24,000.

Meanwhile, negative equity, or mortgage debt that exceeds the value of a home, continued to decline since the recession. The national aggregate value of negative equity was about $301 billion at the end of third-quarter 2019. That was a decline of $2.4 billion from the second quarter of this year.

Nationwide, the negative-equity share of all mortgaged homes was 3.7%, which equates to 2 million properties. That is the lowest share of homes with negative equity since CoreLogic started tracking the metric in third-quarter 2009. Negative equity hit its peak at 26% in fourth-quarter 2009.

“Ten years ago, during the depths of the Great Recession, more than 11 million homeowners had negative equity,” said Frank Nothaft, CoreLogic’s chief economist. “After more than eight years of rising home prices and employment growth, underwater owners have been slashed to just 2 million, or less than 4% of mortgaged homes.”

On a year-over-year basis, negative equity fell 10% from 2.2 million homes, or 4.1% of all mortgaged properties, in third-quarter 2018. Quarter over quarter, the number of mortgaged homes with negative equity decreased 4%.

Areas with large negative-equity shares, however, still dot the country. In Louisiana, for example, 10.1% of mortgaged homes are underwater, more than twice the national average. Eighteen states have an underwater-mortgage share of 4% or higher.


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