Average Homeowner Up $51k Since Q2 2020 As Home Values Soar

Homeowner equity grew $2.9 trillion since Q2 2020, up 29.3%, CoreLogic’s Homeowner Equity Report found.

That shakes out to $51,500 in gains for the average borrower. Homeowners with mortgages make up roughly 63% of all residential properties in the U.S. Fifty-nine percent of borrowers reported they felt highly confident in their ability to make their mortgage payments in the coming year. 

This is great news for underwater borrowers. The number of homes in negative equity has fallen 30% since Q2 2020. In Q2 2021 alone, the number of underwater homes fell 12% to 1.2 million homes, 2.3% of all mortgaged properties.

The national aggregate value of negative equity dropped from $273.2 billion to $268 billion, a year-over-year decrease of about $18.9 billion.

“The growth in homeowner equity provides a strong financial cushion for tens of millions of Americans. For those most impacted by the pandemic, equity gains will help play a critical role in staving off foreclosure,” CoreLogic CEO and president Frank Martell said.

“Based on projected increases in economic activity and home values over the next year, we expect to see further gains in equity and a corresponding drop in negative equity, forbearance rates and foreclosure.”

Forbearances have been trending down in the last few weeks as homeowners exit their expiring plans, falling to 3% this week.

Price changes affect borrowers with equity positions within 5% the most. CoreLogic’s Q2 data suggests that 160,000 homes would be lifted out of negative equity with a 5% price increase, while 211,000 would go underwater if prices dropped by the same amount.

CoreLogic expects the equity boost to positively influence the economy overall.

High tappable equity gives homeowners an array of economic options, according to Thomas Sponholtz, CEO and Chairman of Unison. Unison, a co-investing company, released its own equity report with similar findings this week.

“We’re seeing an unprecedented bifurcation of the market,” he said. “With incredibly strong demand for homes and housing supply significantly below the historical average, many buyers are paying a premium above the listing price – if they’re able to find homes at all. Meanwhile, homeowners are participating in one of the biggest wealth-building moments we’ve seen in residential real estate. The record levels of tappable equity they’re accumulating give them a lot of options, whether they’re eyeing retirement or renovation.”