Homeowners Have Never Been Richer

Homeowners with a mortgage have seen their equity rise by 4.8% year over year. The average homeowner has gained $4,900 in home equity between the second quarter of 2018 and the second quarter of this year, according to CoreLogic’s Home Equity Report.

“Borrower equity rose to an all-time high in the first half of 2019 and has more than doubled since the housing recovery started,” says Frank Nothaft, chief economist for CoreLogic. “Combined with low mortgage rates, this rise in home equity supports spending on home improvements and may help improve balance sheets of households who could take out home equity loans to consolidate their debt.”

The states with the largest annual gains in equity during the second quarter include Idaho, where homeowners saw a gain of $22,100, on average, followed by Wyoming at $20,400, and Nevada at $16,800, CoreLogic’s report shows.

Overall, the western part of the U.S. is seeing some of the strongest equity gains, adds Frank Martell, president and CEO of CoreLogic.

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© CoreLogic

“In July 2019, South Dakota and Connecticut were the only two states to post annual home price declines,” Martell says. “These losses mirror the states’ home equity performances during the second quarter, as both reported negative home equity gains per borrower.”

Homeowners are getting richer, and fewer are in a negative equity position. From the first quarter to the second quarter of this year, the total number of homes with a mortgage that were in negative equity dropped 7% to 2 million homes—or 3.8% of all homes with a mortgage, CoreLogic reports. Negative equity refers to properties where the homeowner still owes more on their home than it is currently worth. Negative equity can reflect properties that have seen a decrease in value or properties that have seen an increase in mortgage debt. Negative equity peaked in the fourth quarter of 2009, when 26% of mortgaged properties fell into that category.

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