As national home prices have continued to climb upward through the first half of 2024, U.S. homeowners with mortgages saw their home equity increase by 9.6% year over year in the first quarter, bringing total net homeowner equity to more than $17 trillion – near all-time highs – at the end of March.
According to the latest CoreLogic Homeowner Equity Report, homeowners with mortgages, which account for roughly 63% of all properties, collectively gained $1.5 trillion in equity since the first quarter of 2023, an average increase of $28,000 per borrower. These figures represent the greatest gains in equity since late 2022.
“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,” said Dr. Selma Hepp, chief economist for CoreLogic. “Importantly, higher prices have also lifted some 190,000 homeowners out of negative equity, leaving only about 1.8% of those with mortgages underwater.”
California (+$64,000), Massachusetts (+$61,000) and New Jersey (+$59,000) led the country for annual home equity gains in the first quarter. Homeowners with mortgages in the Los Angeles metro area netted an average of $72,000 year over year.
Rising home prices through 2023 and the first quarter of 2024 have helped the share of homes with negative equity to fall by 16.1% year over year, to 1.2 million homes or 2.1% of all mortgaged properties. Quarterly, the number of mortgaged homes in negative equity decreased by 2.1%, to one-million homes or 1.8% of all mortgaged properties.
The term "negative equity," also referred to as a borrower being underwater or upside-down on their mortgage, means the borrower owes more on their mortgage than their home is currently worth.
"Low amounts of negative equity are welcomed in markets that have shown price weaknesses this spring, such as Florida (1.1% of homes underwater) and Texas (1.7% of homes underwater) — both of which are below the national rate — as further price declines could drive more homeowners to lose their equity,” Hepp adds.
