U.S. homeowners with mortgages saw their home equity decline by 0.7% year-over-year during the first quarter of the year, according to new data from CoreLogic. This represented a collective loss of $108.4 billion and an average loss of $5,400 per borrower from one year earlier and the first annual home equity losses since 2012.
The number of homes in negative equity – also referred to as underwater or upside-down mortgages – increased 4% year-over-year in the first quarter to 1.2 million homes or 2% of all mortgaged properties, while the quarter-over-quarter levels remained unchanged. But despite this data, CoreLogic insisted the state of home equity was solid.
“Home equity trends closely follow home price changes,” said CoreLogic Chief Economist Selma Hepp. “As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023. The average U.S. homeowner now has more than $274,000 in equity — up significantly from $182,000 before the pandemic. Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.”
