U.S. homeowners with mortgages have seen their equity increase by 6.5 percent year-over-year since the first quarter of 2019, according to CoreLogic’s latest Home Equity Report.
CoreLogic said the first-quarter increase in homeowner equity is a $590 billion gain. CoreLogic said homeowner equity continued to rise throughout the first quarter despite the coronavirus pandemic.
“The pandemic recession will likely lead to price declines in many areas during the next year and weaken home equity gains,” CoreLogic Chief Economist Frank Nothaft said in a release. “However, price declines will be far less than those experienced during the Great Recession, when the national CoreLogic Home Price Index (HPI) fell 33 percent peak-to-trough. Our latest forecast shows the national index to have a peak-to-trough decline of 1.5 percent.”
According to the report, the number of mortgaged properties in negative equity in the first quarter of 2020 fell by 16 percent, compared with the first quarter of 2019, when 2.2 million homes, or 4.1 percent of all mortgaged properties, were in negative equity.
CoreLogic said homeowners gained an average of $9,300 in home equity between the first quarter of 2019 and the first quarter of 2020. It said states with the largest gains included Idaho ($24,400); Washington ($20,80); and Arizona ($19,900).
“Many homeowners will experience a recession during their lifetime, and it is reasonable to compare the current recession to those in the past,” CoreLogic President and CEO Frank Martell said. “But the comparison is not apples to apples — every recession is different.
“Primary drivers of the Great Recession were an overbuilt housing stock, risky mortgages and the collapse of home prices, creating a massive increase in negative equity that proved difficult to recover from,” Martell said. “Today’s housing environment has low vacancy and delinquency rates and a large home equity cushion. While the CoreLogic HPI forecasts a decline in home prices in the coming year, we can also expect the majority of homeowners to remain above water.”