Rising home prices and conservative borrowing have brought home equity gains to an all time high, according the CoreLogic’s Home Equity Report.
Today’s mortgage homeowners - approximately 64% of all properties - saw an equity increase of 5.1% year-over-year in the third quarter. The average homeowner gained $5,300 worth of annual equity in 2018, a nationwide gain of $457 billion.
Home equity increased in 44 of the 50 states. Some states even saw increases over $20,000. Idaho was at the top of the list, with its homeowners gaining an average of $25,809 in equity. Other Mountain West states following close behind, Wyoming and Utah’s homeowners increased their equity by about $23,975 and $21,043. Nevada fell above the national average at $8,000 in increased equity.
Thanks to these rising home prices across the nation, negative equity share also continues to drop. Negative equity - those underwater, owing more on their loans than the value of their home -peaked in the fourth quarter of 2009 at 26% of all mortgaged properties. However, CoreLogic’s current report revealed a decrease from 22 million to 2 million homes, or about 10% in the third quarter, and 4% from the prior quarter. North Dakota was the only state with equity depreciation at -$913.
“Ten years ago, during the depths of the Great Recession, more than 11 million homeowners had negative equity or 25% of mortgages homes,” said Frank Nothaft, chief economist for CoreLogic, “After more than eight years of rising home prices and employment growth, underwater owners have been sloshed to just 2 million, or less than 4% of mortgaged homes.”
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