Home Equity Gains Average $55,300 Over Prior Year

Negative equity drops 24.9%, impacting 2.8% of all mortgaged properties

“Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth,” says Dr. Frank Nothaft, Chief Economist for CoreLogic.  “For low- and moderate-income homeowners, home equity has historically been a major source of wealth.”

Indeed, according to a recent post at CoreLogic, mortgage holders in the U.S. have enjoyed an increase in equity of over $3.2 trillion since Q4, 2020.

This amounts to a climb of 29.3% year over year.

The number of negative equity properties dipped 3% from Q3 2021 to 1.1 million homes representing 2.1% of all mortgaged property.

Year over year, negative equity dropped 24.9% from 1.5 million properties—or 2.8% of all properties with a mortgage—in Q4 2020.

Home price fluctuations are most impactful for borrowers whose equity standing is around +/- 5% of the “negative equity cutoff,” the article notes, and they are most apt to “move out of or into negative equity as prices change.”

For example, in Q4 2021, a home price increase of 5% would translate to 141,000 homes regaining equity.  A 5% drop in home prices would result in 183,000 homes slipping underwater. 

CoreLogic predicts “home prices will increase 5% from December 2021 to December 2022.”

Other interesting facts:

·        In Q4 2021, homeowners gained approximately $55,300 in equity over the prior year.

·        Largest equity growth was found in Hawaii, California, and Washington with average equity growth of $128,300; $117,000, and $95,500 respectively.

·        Lowest equity gains were found in North Dakota and Washington, D.C., with respective $16,800 and $11,100 gains.

Post authored by Lora Bray.

Check out our reviews on Google.

You can find us here on Google.