US homeowners saw equity soar to near-record highs
According to a new CoreLogic report, the typical homeowner saw their home equity increase by $28,000 over the past year.
This year's record-high home price growth has translated into huge leaps in equity for homeowners. According to a new report from Corelogic, home equity jumped to nearly an all-time high in the first quarter of 2024.
How much did homeowners gain? Nationally, homeowners saw their equity increase by 9.6% for an average gain of $28,000 from the end of the first quarter of 2023 through the first quarter of 2024. It's the biggest increase since late 2022, Corelogic researchers said. But not all markets are created equal, and homeowners in some areas saw vastly larger gains in their equity.
The places where home equity has increased the most: The states leading the pack are California, where the typical homeowner's equity increased $64,000 year-over-year; Massachusetts, at $61,000; and New Jersey, at $59,000. Other states with above-average gains include Washington, Maine, New Hampshire and Rhode Island, where equity increased by $40,000 or more in a year.
In terms of metros, Los Angeles homeowners saw their home equity rise by a remarkable $72,000 year-over-year, while Miami homeowners gained $65,000 and Boston homeowners picked up $61,000. Chicago, Las Vegas and Washington, D.C., homeowners also fared well, seeing equity gains of $32,000 or more.
What the experts said: The big uptick in equity has been a boon for existing homeowners, especially as the cost of living has increased, said Dr. Selma Hepp, chief economist for CoreLogic. But it's also helped many homeowners who were upside down on their home loan.
"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," she said. "Importantly, higher prices have also lifted some 190,000 homeowners out of negative equity, leaving only about 1.8% of those with mortgages underwater."
Implications of further home equity gains (or decreases): According to CoreLogic researchers, if home prices increase another 5%, that would lift 111,000 underwater homeowners out of their negative equity situation. On the other hand, if prices were to fall by 5%, 153,000 homeowners would find themselves underwater on their mortgage.