The states with the biggest hits to equity levels during this time include Washington (-$74,300), California (-$59,600) and Utah (-$37,700). These states’ losses coincide with decelerating home prices, which have hit the Western markets the hardest.
But while there has been an overall decline in equity levels year over year, there was a slight uptick recorded between Q4 2022 and Q1 2023, according to CoreLogic Chief Economist Selma Hepp.
“Home equity trends closely follow home price changes,” Hepp said. “As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.”
The number of homeowners in negative equity situations, including upside-down or “underwater” mortgages, remain virtually unchanged since Q4 2022, according to the report. In higher-priced metros like Los Angeles and San Francisco, larger declines were held at bay by the sizable appreciation, and the negative equity shares are stable at 0.9%.
“The average U.S. homeowner now has more than $274,000 in equity — up significantly from $182,000 before the pandemic,” Hepp said. “Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.”
The Q2 2023 report is scheduled for release in September, according to CoreLogic.