CoreLogic®, a leading provider of global property data, analytics, and solutions, has released its Homeowner Equity Report (HER) for the third quarter of 2024. According to the report, U.S. homeowners with mortgages, which represent approximately 62% of all properties, saw an increase of $425 billion in home equity from Q3 2023 to Q3 2024. This represents a 2.5% year-over-year growth, bringing the total net homeowner equity to more than $17.5 trillion by the end of the third quarter of 2024.
Despite the growth, average homeowner equity has remained near historical peaks, with homeowners holding an average equity of over $311,000. However, recent weather catastrophes have underscored the vulnerability of this equity, particularly for households that rely on homeownership as their primary source of wealth.
For the first time since the fourth quarter of 2022, the U.S. saw an increase in the share of negative equity on a quarterly basis. The number of residential properties in negative equity rose by 30,000, a 1.8% increase compared to the previous quarter. As of Q3 2024, nearly 1 million homeowners are facing negative equity, a situation where the value of the home is less than the outstanding mortgage.
While these negative equity trends are concerning, many homeowners have still benefitted from rising home prices, which have contributed to equity growth. However, the equity gain from Q3 2023 to Q3 2024 has slowed significantly. The average equity gain was $5,700, far less than the $25,400 gain recorded in the previous quarter.
Regional trends show that the Northeast saw the strongest home equity gains, with significant increases in home prices. In states like New Jersey and Rhode Island, home prices reached record highs in October, with year-over-year price increases of 8.1% and 7.5%, respectively. These states saw some of the highest average equity gains in the nation, with homeowners seeing equity increases of $43,000.
On the other hand, areas that had been popular for remote workers during the pandemic, such as Hawaii, Colorado, and Idaho, experienced a decline in home equity. Hawaii, in particular, saw a substantial decrease, with homeowners losing an average of $34,000 in equity. This drop in equity is attributed in part to the devastating wildfires in Maui in 2023, which caused a major hit to local property values.
Dr. Selma Hepp, Chief Economist at CoreLogic, stated, “As home prices flattened in the third quarter, home equity gains also slowed, and in some regions, they even declined. While home equity is heavily tied to home prices, natural disasters can also significantly impact equity, as seen in Hawaii following the wildfire. In such cases, homeowners can lose much of their equity, especially if they are not properly insured.”
Despite the challenges in certain regions, Hawaii remains a leader in homeowner equity, with an average equity of $700,000. Across the U.S., average homeowner equity is still at historical highs, with the national average surpassing $311,000. The third-quarter report highlights the ongoing importance of maintaining home equity, especially in the face of unpredictable market and weather-related events.
The national aggregate value of negative equity was approximately $324 billion at the end of Q3 2024, a 1% increase from the previous quarter and a 3% rise from the previous year. Negative equity peaked in Q4 2009, when it affected 26% of mortgaged residential properties.
At the state level, Rhode Island, New Jersey, and New York experienced some of the largest equity gains, while Hawaii, Colorado, and Idaho saw losses. As of Q3 2024, the average homeowner nationwide had gained approximately $5,700 in equity over the past year.
Metropolitan areas such as Las Vegas and Los Angeles were among the least impacted by negative equity, with negative equity rates of just 0.6% and 0.8%, respectively.
CoreLogic plans to release the next Homeowner Equity Report in March 2025, which will cover Q4 2024. For ongoing updates on housing trends and insights, visit the CoreLogic Intelligence Blog.
Methodology: CoreLogic determines equity by comparing a property’s estimated current value to the outstanding mortgage debt. If the mortgage debt exceeds the property’s estimated value, it is considered in negative equity. The report is based on public record data, covering over 50 million mortgage liens, and is adjusted for amortization and home equity utilization.
