The Average U.S. Homeowner Gained $7,300 of Equity in 2019

96,000 Homeowners in U.S. Regained Positive Equity in Q4 of 2019

CoreLogic is reporting this week that U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase by 5.4% year over year, representing a gain of nearly $489 billion since the fourth quarter of 2018.

CoreLogic's latest Home Equity Report for the fourth quarter of 2019 is also reporting that the average U.S. homeowner gained $7,300 in home equity between the fourth quarter of 2018 and the fourth quarter of 2019. States with the largest gains include Idaho, where homeowners gained an average of $18,700; Wyoming, where homeowners gained an average of $17,900 and Arizona, where homeowners gained an average of $14,800.

From the third quarter of 2019 to the fourth quarter of 2019, the total number of mortgaged homes in negative equity decreased by 4.8% to 1.9 million homes or 3.5% of all mortgaged properties. The number of mortgaged properties in negative equity during the fourth quarter of 2019 fell by 15%, or 330,000 homes, compared to the fourth quarter of 2018, when 2.2 million homes, or 4.2% of all mortgaged properties, were in negative equity.

"The CoreLogic Home Price Index recorded a quickening of home price gains during the fourth quarter of 2019, helping to boost home equity wealth," said Dr. Frank Nothaft, chief economist for CoreLogic. "The average family with a mortgage had a $7,300 gain in home equity during the past year, and a total of $177,000 in home equity wealth."

Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in a home's value, an increase in mortgage debt or both. Negative equity peaked at 26% of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis, which began in the third quarter of 2009.

The national aggregate value of negative equity was approximately $283 billion at the end of the fourth quarter of 2019. This is down quarter over quarter by approximately $19.9 billion, or 6.6%, from $302.6 billion in the third quarter of 2019 and down year over year by approximately $20.4 billion, or 6.7%, from $303 billion in the fourth quarter of 2018.

"The number of underwater homes in the United States has fallen to the lowest level since the Great Recession. In general, Western states and those in the mid-Atlantic region are registering strong gains, compared to states in the Northeast and upper Midwest," said Frank Martell, president and CEO of CoreLogic. "With unprecedented low rates and constrained supply, the housing market should continue to do well. Viewed against the backdrop of the recent stock market volatility, steady gains in home equity are a welcome source of stability."