Homeowners with mortgages, which account for roughly 63 percent of all properties, saw equity increase in the second quarter by 27.8 percent year-over-year, according to CoreLogic’s Homeowner Equity Report. That increase represented a collective gain of $3.6 trillion, for an average of $60,200 per borrower, since the second quarter of 2021.
The total average equity per borrower reached almost $300,000, the highest in the data series. Home price growth and the refinance boom of the last two years helped bring down the national average loan-to-value ratio to 42 percent, the lowest in the series since 2010.
“For many households, home equity is the only source of wealth creation,” CoreLogic interim lead of the Office of the Chief Economist Selma Hepp said in a release. “As a result, recent record gains in equity and record declines in loan-to-value ratios will provide many owners with a financial buffer in case economic conditions worsen. In addition, record equity continues to provide fuel for housing demand, particularly if households are relocating to more affordable areas.”
Fifteen states posted higher equity gains than the national average in the second quarter, led by Hawaii ($130,000 year-over-year equity gain per borrower), California ($117,000) and Florida ($100,000). Other states in the top 10 were Arizona ($89,000), Washington and Nevada ($82,000), Colorado ($76,000), Utah ($71,000), North Carolina ($70,000) and Tennessee ($69,000).
Negative equity, also referred to as underwater or upside-down mortgages, applies to borrowers who owe more on their mortgages than their homes are currently worth. The number of mortgaged homes in negative equity decreased by 7 percent from the first to second quarter to 1 million homes, or 1.8 percent of all mortgaged properties.
Annually, 1.3 million homes, or 2.3 percent of all mortgaged properties, were in negative equity in the second quarter. That’s down 18 percent year-over-year.