Home equity continued to rise in the second quarter of 2024 as residential properties with mortgages collectively gained $1.3 trillion in equity over the past year. But growth began to slow during these three months, according to the CoreLogic Homeowner Equity Insights report published on Thursday.
The aggregate equity gain was 8% year over year, bringing total equity on mortgaged properties to more than $17.6 trillion at the end of Q2 2024. But pace of growth slowed, CoreLogic reported, as these homeowners saw an average gain of $25,000 during the year ending in June, which was down from $28,000 during the year ending in March.
Annual equity gains at the state level were led by Maine ($58,000), California ($55,000) and New Jersey ($53,000). Northeastern states continued to show the strongest level of growth overall, while three states — Texas (-$2,600), Oklahoma (-$7,700) and North Dakota (-$8,400) — posted modest equity losses.
CoreLogic chief economist Selma Hepp said in a statement that home-price growth has continued to fuel overall equity gains, with existing homeowners now averaging about $315,000 in equity. This is nearly $129,000 higher than the average equity level per homeowner recorded at the start of the COVID-19 pandemic in early 2020.
“The substantial accumulation of home equity for existing homeowners has served as an important financial buffer in times of uncertainty, as some homeowners facing higher costs of homeowners’ insurance and taxes and have had to tap into their equity to prevent falling behind on their mortgages,” Hepp explained.
“As a result, mortgage delinquency rates have remained at historical lows despite the inflationary pressures and higher costs of almost all non-mortgage homeownership-related expenses.”
Negative equity — which refers to “underwater” mortgages, or those with higher mortgage balances than the home’s value — continued to see modest declines in Q2 2024, according to the report.
On a quarterly basis, the number of homes with negative equity fell by 4.2% to 1 million and now account for about 1.7% of all mortgaged properties in the U.S. On an annualized basis, the decline reached 15%, or 1.1 million homes.
