Despite a slowdown in price appreciation, U.S. homeowners with mortgages have experienced a notable increase in equity. According to CoreLogic, the average homeowner added $28,000 to their equity in the first quarter of the year compared to the previous year.
CoreLogic's latest report reveals a significant increase in aggregate home equity, which rose by $1.5 trillion in the first three months of 2024, reaching over $17 trillion. This surge has pushed the average home equity for mortgage holders to $305,000 per owner, reflecting a nearly 10% increase nationwide.
Regional Highlights
Certain states have seen even more substantial equity gains. Homeowners in California, for instance, gained an average of $64,000 in equity, with those in the Los Angeles metro area experiencing a $72,000 increase. New Jersey also reported significant growth, with an average increase of $59,000, leading the Northeast region.
“Higher prices have lifted approximately 190,000 homeowners out of negative equity, leaving only about 1.8% of those with mortgages underwater,” stated Dr. Selma Hepp, chief economist for CoreLogic. “Home equity provides a crucial financial buffer for mortgage holders facing rising costs in other areas, such as insurance, taxes, and HOA fees.”
The number of U.S. homes in negative equity decreased to 1.2 million in the first quarter of 2024, a 16% drop from the previous year, now representing just 2% of all mortgaged homes nationwide.
Price Gains Continue
Home prices continued their upward trend in early 2024, with the S&P CoreLogic Case-Shiller Index reaching a new peak in March. The index saw gains of 6% in January and 6.4% in February, with March matching February’s rate. San Diego led the gains with an 11% rise.
“We’ve seen records repeatedly break in both the stock and housing markets over the past year,” commented Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “Our National Index has hit new highs in six of the last twelve months, alongside record performance in the stock market, with the S&P 500 reaching new all-time highs on 35 trading days in the past year.”
This trend in rising home equity and home prices underscores the resilience and growth potential in the U.S. housing market, providing homeowners with increased financial stability and investment opportunities.