by Calculated Risk on 9/12/2024 09:51:00 AM

From CoreLogic: CoreLogic: US Homeowners See Equity Gains Continue to Climb, but at a Slower Pace in Q2

CoreLogic® ... today released the Homeowner Equity Report (HER) for the second quarter of 2024. The report shows that U.S. homeowners with mortgages (which account for roughly 62% of all properties) saw home equity increase by 8.0% year over year, representing a collective gain of $1.3 trillion and an average increase of $25,000 per borrower since the second quarter of 2023, bringing the total net homeowner equity to over $17.6 trillion in the second quarter of 2024.
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“Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.” said Dr. Selma Hepp, chief economist for CoreLogic. “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. 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, also referred to as underwater or upside-down mortgages, applies to borrowers who owe more on their mortgages than their homes are currently worth.

Negative equity has continued to see a recent decrease across the country. Las Vegas and Los Angeles are the least challenged, with negative equity shares of all mortgages at 0.6% and 0.7%, respectively.

As of the second quarter of 2024, the quarterly and annual changes in negative equity were:


Click on graph for larger image.

• Quarterly change: From the second quarter of 2023 to the second quarter of 2024, the total number of mortgaged homes in negative equity decreased by 4.2%, to 1 million homes or 1.7% of all mortgaged properties.

• Annual change: From the second quarter of 2023 to the first second of 2024, the total number of homes in negative equity decreased by 15%, to 1.1 million homes or 2.0% of all mortgaged properties.

emphasis added

The above graph is from CoreLogic and compares Q2 2024 to Q1 2024 equity distribution by LTV. There are still a few properties with LTV over 125%.  But most homeowners have a significant amount of equity.  

This is a very different picture than at the start of the housing bust when many homeowners had little equity.

The second graph is from a 2011 CoreLogic report and shows a large number of homeowners with negative equity - even as house prices were nearing a bottom!

On a year-over-year basis, the number of homeowners with negative equity has decreased to 1.11 million.