by Calculated Risk September 12, 2024 9:51 AM
CoreLogic says: CoreLogic: U.S. homeowners see stock gains continuing to rise in the second quarter, but at a slower pace
CoreLogic® …Released TodayHomeowner Equity Report (HER)Homeowner net worth is projected to exceed $17.6 trillion in Q2 2024. According to the report, home equity for U.S. homeowners with a mortgage (which represents approximately 62% of all real estate) will grow 8.0% year over year, for a total increase of $1.3 trillion, an average increase per borrower of $25,000 since Q2 2023, resulting in total net homeowner wealth exceeding $17.6 trillion in Q2 2024.
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“Sustained increases in home prices continue to drive home equity growth for existing homeowners, whose property is now worth an average of about $315,000, about $129,000 more than when the pandemic began,” said Dr. Selma Hepp, chief economist at CoreLogic. “The significant increase in home equity for existing homeowners is acting as an important financial buffer in uncertain times. Some homeowners are facing rising costs for home insurance and taxes, forcing them to dip into the value of their equity to stay afloat on their mortgage payments. As a result, mortgage delinquency rates remain at record lows despite inflationary pressures and rising costs for nearly all non-mortgage related expenses associated with homeownership.”Negative equity applies to borrowers who owe more on their mortgage than the home is currently worth.
Nationwide, negative equity has been declining recently, with Las Vegas and Los Angeles having the least problems, with negative equity as a percentage of total mortgages at 0.6% and 0.7%, respectively.
As of the second quarter of 2024, the quarterly and annual changes in debt and net assets are as follows:
Click on the graph to enlarge the image.
• Quarterly changes: From Q2 2023 to Q2 2024, the total number of homes with negative mortgage balances fell 4.2% to 1 million, or 1.7% of all mortgaged properties.
• Annual change:From Q2 2023 to Q1 2024, the total number of homes with negative total debt declined 15%, to 1.1 million, or 2.0% of all mortgaged properties.
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The chart above is from CoreLogic and compares asset allocation by LTV for Q2 and Q1 2024. While there are still some properties with LTVs above 125%, most homeowners have significant equity.
This is a stark difference from when the housing bubble first burst, when many homeowners had very little equity.Compared to a year ago, the number of homeowners with negative total debt fell to 1.11 million.
