Homeowners in the United States now control more than $8 trillion in home equity, more than double the amount from just five years ago.
The average homeowner reaped $13,000 in additional home equity between the second quarters of 2016 and 2017, according to the most recent data from real estate research firm CoreLogic. Western homeowners saw the biggest jumps, with Washington State residents logging a $40,000 boost, Hawaiians taking home $34,000, and Californians gaining $30,000 in additional equity.
Utah and Massachusetts — the only East Coast state to break $20,000 in gains — rounded out the top five. Only Alaskans saw a decline, with the average homeowner in the Last Frontier losing $1,000.
“Over the last 12 months, approximately 750,000 borrowers achieved positive equity,” CoreLogic chief economist Frank Nothaft said in the report. “This means that mortgage risk continues to decline and, given the continued strength in home prices, CoreLogic expects home equity to rise steadily over the next year.”
Negative equity — which occurs when a home is “underwater,” or worth less than the mortgage value — ticked up slightly from the first quarter of this year, but still remains below last year’s figure: U.S. homeowners had a total of $284.4 billion in negative equity, down from $285.1 billion at the same time last year. That works out to 5.4% of all mortgage properties; for comparison, American negative equity peaked in the third quarter of 2009, when 26% of all mortgage properties had negative equity, according to CoreLogic.
The Miami area continues to struggle the hardest with negative equity, with a 14.7% underwater rate; the Las Vegas, Chicago, Washington, D.C., and New York City metros followed behind in the top five cities for negative equity.
Still, CoreLogic remained upbeat about overall home equity trends in the present and the near future.
“This rapid rise in homeowner equity not only reduces mortgage risk, but also supports consumer spending and economic growth,” CoreLogic president and CEO Frank Martell said in the report.
Written by Alex Spanko