Homeowners gaining more equity
Last Updated: March 22, 2018 | View all posts by Kelly Leighton
The average homeowner gained approximately $15,100, or 12.2 percent, year-to-year, in equity in 2017.
According to the CoreLogic Homeowner Equity Insights for the fourth quarter of 2017, no states showed a decrease in equity, while Pennsylvania homeowners saw an average raise of $7,000 in equity. For the last quarter of 2017, the number of mortgaged homes with negative equity dropped 1 percent from the third quarter, representing 4.9 percent of all mortgaged properties, equal to 2.5 million homes. Year-to-year, negative equity fell 21 percent from 3.2 million properties, or 6.3 percent of all mortgaged homes.
“Home-price growth has been the primary driver of home-equity wealth creation,” said Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index grew 6.2 percent during 2017, the largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years. Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”
Across the country, the aggregate value of negative equity was $283.1 billion at the end of 2017, up 2.1 percent from the third quarter, but down 1.1 percent year-to-year. In Pennsylvania, the negative equity share was 4.2 percent.
“There are wide disparities in home-equity gains by geographic area, with higher-priced, capacity constrained markets along the East and West Coasts registering the largest increases,” said Frank Martell, president and CEO of CoreLogic. “The average homeowner in California and Washington had a wealth gain of about $40,000, reflecting the high price of homes in California and the rapid appreciation in Washington. In contrast, the average owner in Louisiana had little change in their housing wealth during 2017, given much lower prices and modest price growth.”
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