Homeowner Equity Insights – Q2 2024

Data Through Q2 2024

The CoreLogic Homeowner Equity Insights report, is published quarterly with coverage at the national, state, and metro level and includes negative equity share and average equity gains. The report features an interactive view of the data using digital maps to examine CoreLogic homeowner equity analysis through the second quarter of 2024.

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 home value, an increase in mortgage debt, or both.

This data only includes properties with a mortgage. Non-mortgaged properties (that are owned outright) are not included.

Homeowner Equity Q2 2024

CoreLogic analysis shows U.S. homeowners with mortgages (roughly 62% of all properties*) have seen their equity increase by a total of $1.3 trillion since the second quarter of 2023, a gain of 8.0% year over year, bringing the total net homeowner equity to over $17.6 trillion in the second quarter of 2024.

*Homeownership mortgage source: 2016 American Community Survey.

In the second quarter of 2024, the total number of mortgaged residential properties with negative equity decreased by 4.2% from the first quarter of 2024, to currently about 960,000 homes with negative equity, or 1.7% of all mortgaged properties. On a year-over-year basis, negative equity declined by 15%, or about 169,000 fewer homes in negative equity from the second quarter of 2023.

Because home equity is affected by home price changes, borrowers with equity positions near (+/- 5%) the negative equity cutoff are most likely to move out of or into negative equity as prices change, respectively. Looking at the second quarter of 2024 book of mortgages, if home prices rose by 5%, 105,000 homes would regain equity; if home prices fell by 5% 139,000 would fall underwater. The CoreLogic HPI Forecast ^TM projects that home prices will increase by 2.3% from June 2024 to June 2025.

Equity Gains Remain Strong in the Northeast and California

Equity gains continued for U.S. homeowners in the second quarter of 2024, which has served as a financial buffer for many in the face of rising taxes and insurance costs. Despite the swelling cost of homeownership and the resulting pressures on affordability, mortgage delinquencies have remained low across the country.  

States in the Northeast, where equity gains are strongest, also saw the most home price growth. California, the nation’s most expensive state, also saw large equity gains. Among the metros measured, the popular Southern California destination of Los Angeles is one of those least challenged by negative equity. The metro had one of the smallest shares of negative equity for all mortgages in the area. Meanwhile, destinations like Colorado, Texas, and Idaho, which were popular during the pandemic, had more muted equity gains.

National Aggregate Value of Negative Equity: Q2 2024

The national aggregate value of negative equity was approximately $318 billion at the end of the second quarter of 2024. This is down quarter over quarter by approximately $3.7 billion, or 1%, from $322 billion in the first quarter of 2024 and down year over year by approximately $19.7 billion, or 6%, from $338 billion in the second quarter of 2023. 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.

“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. The substantial accumulation of home equity for existing homeowners has served as an important financial buffer in times of uncertainty, as some homeowners are 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.”

-Dr. Selma Hepp

Chief Economist for CoreLogic

National Homeowner Equity

For the second quarter of 2024, the average U.S. homeowner gained approximately $25,000 in equity during the past year.

Maine ($58K), California ($55K), and New Jersey ($53K) experienced the largest average national equity gains. Three states posted annual equity losses: Texas (-$3K), Oklahoma (-$8K), and North Dakota (-$8K).

10 Select Metros Change

CoreLogic provides homeowner equity data at the metropolitan level. In this graphic, 10 of the largest cities, by housing stock, are depicted. 

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.

Loan-to-Value Ratio (LTV)

This chart shows national homeowner equity distribution across multiple LTV segments.

Summary

CoreLogic began reporting homeowner equity data in the first quarter of 2010; at that time, the equity picture for homeowners was rather bleak in the United States. Since then, many homes have regained equity and the outstanding balance on the majority of mortgages in this country are now equal to or in a positive position when compared to their loan balance. 

CoreLogic will continue to report on homeowner equity as it continues to adjust in communities and states across the country. To learn more about homeowner equity, visit the CoreLogic Intelligence home page.

Methodology

The amount of equity for each property is determined by comparing the estimated current value of the property against the mortgage debt outstanding (MDO). If the MDO is greater than the estimated value, then the property is determined to be in a negative equity position. If the estimated value is greater than the MDO, then the property is determined to be in a positive equity position. The data is first generated at the property level and aggregated to higher levels of geography.  CoreLogic uses public record data as the source of the MDO, which includes more than 50 million first- and second-mortgage liens, and is adjusted for amortization and home equity utilization in order to capture the true level of MDO for each property. Only data for mortgaged residential properties that have a current estimated value are included. There are several states or jurisdictions where the public record, current value or mortgage data coverage is thin and have been excluded from the analysis. These instances account for fewer than 5% of the total U.S. population. The percentage of homeowners with a mortgage is from the 2019 American Community Survey. Data for the previous quarter was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

CoreLogic HPI Forecasts™ are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers — “Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, metropolitan areas and ZIP Code levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2% margin of error for the index.