Borrower equity has more than doubled since the start of the housing recovery
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Homeowners with mortgages have gained more home equity as the number of mortgaged homes in negative equity dropped.
The equity of nearly 63% of homeowners grew by 4.8% annually, or roughly $428 billion, since the second quarter of last year, according to the latest CoreLogic Home Equity Report.
The report found that the average homeowner reaped $4,900 in home equity between Q2 2018 and Q2 2019. Homeowners in Idaho saw the largest equity gains at an average of $22,100. Wyoming and Nevada followed with average earnings of $20,400 and $16,800.
“Borrower equity rose to an all-time high in the first half of 2019 and has more than doubled since the housing recovery started,” said CoreLogic Chief Economist Frank Nothaft. “Combined with low mortgage rates, this rise in home equity supports spending on home improvements and may help improve balance sheets of households who could take out home equity loans to consolidate their debt.”
The total number of mortgaged homes in negative equity also fell by 7% to 2 million homes from the first quarter to the second quarter of 2019.
The national aggregate value of negative equity was down by $2.6 billion to $302.7 billion at the end of the second quarter. In the first quarter, the aggregate value was $305.3 billion.
"Home values have continued to rise in most parts of the country this year and we are seeing the benefit in higher home equity levels,” said Frank Martell, president and chief executive officer of CoreLogic. “The western half of the US has experienced particularly strong gains in home equity recently. In July 2019, South Dakota and Connecticut were the only two states to post annual home price declines. These losses mirror the states' home equity performances during the second quarter as both reported negative home equity gains per borrower."
