CoreLogic: U.S. Homeowners See Equity Gains Continue to Climb, but at a Slower Pace in Q2

• Total homeowner equity for borrowers with a mortgage reached $17.65 Trillion in second quarter.
• U.S. homeowners with a mortgage pulled in $25,000 in equity gains year over year in second quarter of 2024, down from last quarter’s $28,000.
• Maine ($58K), California ($55K) and New Jersey ($53K) led the country for annual home equity gains in the second quarter.
• Las Vegas is the least challenged market with the lowest share of underwater homes in the second quarter.

CoreLogic®, a leading global property information, analytics and data-enabled solutions provider, today released the Homeowner Equity Report (HER) for the second quarter of 2024. The report shows that U.S. homeowners with mortgages (which account for roughly 62% of all properties) saw home equity increase by 8.0% year over year, representing a collective gain of $1.3 trillion and an average increase of $25,000 per borrower since the second quarter of 2023, bringing the total net homeowner equity to over $17.6 trillion in the second quarter of 2024

States in the Northeast, where equity gains are strongest, saw the strongest annual home price growth in the second quarter. Maine led the charge for largest average national equity gain ($57,500), followed by California ($55,300) and New Jersey ($52,600). Three states posted annual equity losses: Texas (-$2,600), Oklahoma (-$7,700), and North Dakota (-$8,400).

“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.”

Negative equity, also referred to as underwater or upside-down mortgages, 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.

As of the second quarter of 2024, the quarterly and annual changes in negative equity were:

• Quarterly change: 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.
• Annual change: From the second quarter of 2023 to the first second of 2024, the total number of homes in negative equity decreased by 15%, to 1.1 million homes or 2.0% of all mortgaged properties.

Because home equity is affected by home price changes, borrowers with equity positions near (+/- 5%), the negative equity cutoff, are most likely to move out of or into negative equity as prices change, respectively. Looking at the first quarter of 2024 book of mortgages, if home prices increase by 5%, 105,000 homes would regain equity; if home prices decline by 5%, 139,000 properties would fall underwater. The CoreLogic HPI Forecast™ projects that home prices will increase by 2.3% from June 2024 to June 2025.

The next CoreLogic Homeowner Equity Report will be released in December 2024, featuring data for Q3 2024. For ongoing housing trends and data, visit the CoreLogic Intelligence Blog: www.corelogic.com/intelligence.

Methodology

The amount of equity for each property is determined by comparing the estimated current value of the property against the mortgage debt outstanding (MDO). If the MDO is greater than the estimated value, then the property is determined to be in a negative equity position. If the estimated value is greater than the MDO, then the property is determined to be in a positive equity position. The data is first generated at the property level and aggregated to higher levels of geography. CoreLogic uses public record data as the source of the MDO, which includes more than 50 million first- and second-mortgage liens and is adjusted for amortization and home equity utilization in order to capture the true level of MDO for each property. Only data for mortgaged residential properties that have a current estimated value are included. There are several states or jurisdictions where the public record, current value or mortgage data coverage is thin and have been excluded from the analysis. These instances account for fewer than 5% of the total U.S. population. The percentage of homeowners with a mortgage is from the 2019 American Community Survey. Data for the previous quarter was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Source: CoreLogic

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