U.S. mortgage borrowers saw their home equity increase 8% in the second quarter of 2024, with total net homeowner equity rising to $17.6 trillion.
Homeowners with mortgages, which account for roughly 62% of all properties, experienced an average $25,000 increase in equity since Q2 2023, representing a collective gain of $1.3 trillion year-over-year, according to property data provider CoreLogic.
A Lifeline In Hard Times
Building home equity is a way for borrowers to strengthen their property values and personal wealth. Many homeowners were able to lean on that in recent times, as financial pressures and inflation have been higher than normal.
“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 Dr. 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.”
Topping the list of states with the highest average equity gains across the U.S. in Q2 YOY were Maine, where borrowers saw a $57,500 increase, California ($55,300), and New Jersey ($52,600).
Some Still Underwater
Also referred to as underwater or upside-down mortgages, negative equity applies to borrowers who owe more on their mortgages than their homes are currently worth. Negative equity has continued to see a recent decrease across the country. Las Vegas and Los Angeles are the least challenged, with negative equity shares of all mortgages at 0.6% and 0.7%, respectively.
From the second quarter of 2023 to the second quarter of 2024, the total number of mortgaged homes in negative equity decreased by 4.2%, to 1 million homes or 1.7% of all mortgaged properties.
Just three states posted annual equity losses: Texas (-$2,600), Oklahoma (-$7,700), and North Dakota (-$8,400).
What Lies Ahead
Home equity is only expected to rise going into next year. CoreLogic’s HPI Forecast projects home prices will increase by 2.3% from June 2024 to June 2025.
CoreLogic plans to release its Homeowner Equity Report for Q3 2024 this December.
