In the first quarter of 2024, the CoreLogic Homeowner Equity Insights report revealed significant equity gains for U.S. homeowners, particularly those with mortgages, which comprise about 62% of all residential properties. These properties saw an impressive collective equity increase of $1.5 trillion, marking a 9.6% growth compared to the previous year. Notably, the report highlighted a substantial decrease in properties with negative equity, with a 16.1% reduction from the previous year. This is an essential factor for us in the Sacramento metro area, where market stability reflects these national trends.

As a real estate expert in Sacramento, I leverage this data to provide my clients with precise and timely advice, ensuring they understand the robust growth potential and the reduced risks associated with negative equity. This knowledge is crucial for both current homeowners looking to leverage their equity 🏠 and potential buyers considering entering the market 📈. My insights, grounded in the latest CoreLogic report, enable clients to make informed decisions that align with their long-term real estate goals in our local market. 🌟

Homeowner Equity Insights – Q1 2024

• June 7, 2024

Data Through Q1 2024

Introduction

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 first 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 Q1 2024

CoreLogic analysis shows U.S. homeowners with mortgages (roughly 62% of all properties*) have seen their equity increase by a total of $1.5 trillion since the first quarter of 2023, a gain of 9.6% year over year.

*Homeownership mortgage source: 2016 American Community Survey.

Chart 1: U.S. home equity changes year over year, Q1 2024

In the first quarter of 2024, the total number of mortgaged residential properties with negative equity decreased by 2.1%  from the fourth quarter of 2023, representing 1 million homes, or 1.8% of all mortgaged properties. On a year-over-year basis, negative equity declined by 16.1% from 1.2 million homes, or 2.1% of all mortgaged properties, from the first 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 first quarter of 2024 book of mortgages, if home prices increase by 5%, 110.000 homes would regain equity; if home prices decline by 5% 153,000 would fall underwater. The CoreLogic HPI Forecast ^TM projects that home prices will increase by 3.7% from March 2024 to March 2025.

Chart 2: U.S. negative home equity changes year over year, Q1 2024

California Leads U.S. for Annual Equity Gains in Q1

U.S. homeowners with a mortgage continued to see healthy annual equity gains in the opening quarter of 2024. As one of the nation’s most expensive states with perpetually high housing demand, California homeowners saw the largest equity gain in the country at $64,000, with those in the Los Angeles metro area netting $72,000 year over year. Most of the other large equity gains were concentrated in the Northeast, including New Jersey ($59,000), a state that has ranked in the top three for annual appreciation in CoreLogic’s monthly Home Price Insights report since last fall.

National Aggregate Value of Negative Equity: Q1 2024

The national aggregate value of negative equity was approximately $321 billion at the end of the first quarter of 2024. This is down quarter over quarter by approximately $2.8 billion, or 1%, from $324 billion in the fourth  quarter of 2023 and down year over year by approximately $17.6 billion, or 5%, from $339 billion in the first 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.

Chart 3: Negative equity share by U.S. state, Q1 2024

“With home prices continuing to reach new highs, owners are also seeing their equity approach the historic peaks of 2023, close to a total of $305,000 per owner. Importantly, higher prices have also lifted some 190,000 homeowners out of negative equity, leaving only about 1.8% of those with mortgages underwater. Home equity is key to mortgage holders who have seen other homeownership costs soar, including insurance, taxes and HOA fees, as a source of financial buffer. Also, low amounts of negative equity are welcomed in markets that have shown price weaknesses this spring, such as Florida (1.1% of homes underwater) and Texas (1.7% of homes underwater) — both of which are below the national rate — as further price declines could drive more homeowners to lose their equity.”

-Dr. Selma Hepp

Chief Economist for CoreLogic

National Homeowner Equity

In the first quarter of 2024, the average U.S. homeowner gained approximately $28,000 in equity during the past year.

California ($64,000), Massachusetts ($61,000) and New Jersey ($59,000) posted the largest average national equity gains. No states saw annual equity losses.

Chart 4: Average home equity changes by U.S. state year over year, Q1 2024

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 seen a recent decrease across the country. Las Vegas is the least challenged, with the negative equity share of all mortgages at 0.6%.

Chart 5: Percentage of homes in negative equity for 10 select U.S. metro areas, Q1 2024

Loan-to-Value Ratio (LTV)

This chart shows National Homeowner Equity Distribution across multiple LTV Segments.

Chart 6: Home equity distribution across multiple LTV segments, Q4 2023 and Q1 2024

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.