Home-equity wealth has skyrocketed in the last year as the number of underwater homes has fallen
Homeowners have gained nearly $1 trillion in equity over the past year, according to new data from CoreLogic.
According to the analytics firm’s second-quarter Home Equity Report, US homeowners with mortgages – who account for about 63% of all properties – have seen their equity jump by 12.3% over the last year, representing a gain of about $981 billion since the second quarter of 2017. The average homeowner gained $16,200 in home equity between Q2 of 2017 and Q2 of 2018. Western states saw the most significant equity gains, with California homeowners seeing an average gain of $48,800 and Washington homeowners seeing an average gain of $41,100.
Meanwhile, the total number of mortgaged homes in negative equity fell 9% quarter over quarter to 2.2 million, or 4.3% of all mortgaged properties. Year over year, the number of underwater properties dropped 20.1%.
“Homeowner properties continued to increase in value this quarter with homeowners gaining an average of $16,200 in home-equity wealth,” said Dr. Frank Nothaft, chief economist for CoreLogic. “When aggregated across all homeowners, that totals almost $1 trillion in gains in home-equity wealth. This wealth gain will support additional consumption spending and home-improvement expenditures in coming years.”
The national aggregate value of negative equity was about $279.8 million at the end of the second quarter. That’s down about $5.5 million from the first quarter.
“Negative equity levels continue to drop across the US, with the biggest declines in areas with strong price appreciation,” said Frank Martell, president and CEO of CoreLogic. “Further, the relatively low level of shadow inventory contributes to the chronic shortage of housing supply and price increases in many markets.”