Double-Digit Home Price Gains Boosted Home Equity to New Highs

Borrower Equity Update: First Quarter 2021


  • Average equity gain of $33,400 per borrower in Q1 2021 was the highest in at least 10 years.
  • National negative equity share was 2.6% Q1 2021, the lowest in over 10 years.

National Home Equity Trends

The amount of equity in mortgaged real estate increased by $1.9 trillion in Q1 2021, an annual increase of 19.6%, according to the lastest CoreLogic Homeowner Equity Report . The average annual gain in equity was $33,400 per borrower — the largest average equity gain in at least 10 years.

The nationwide negative equity share for Q1 2021 was 2.6% of all homes with a mortgage, the lowest share of homes with negative equity since CoreLogic started tracking this number in the third quarter of 2009.  The number of properties in negative equity decreased by 450,000 from Q1 2020 to Q1 2021.

While the coronavirus pandemic created economic uncertainty for many, the continued acceleration in home prices over the last year has meant existing homeowners saw a notable boost in home equity. The accumulation of equity has become critically important to homeowners deciding on their post-forbearance options. In contrast to the 2008 financial crisis, when many borrowers were underwater, borrowers today who are behind on mortgage payments can tap into their equity and sell their home rather than lose it through foreclosure.

State and Metro Level Home Equity

Figure 1 shows the ten states with the largest negative equity shares in Q1 2021. Louisiana stands apart with 8.3% of mortgages with negative equity — more than three times the national average. Iowa (5.6%) and Illinois (5.4%) rounded out the top three states with the highest negative equity shares. States with high negative equity shares have experienced low home price appreciation compared with the national average. In addition, places with high negative equity shares are at higher risk for foreclosure and distressed sales.

Figure 1: Ten States With the Largest Negative Equity Shares
Q1 2021

Figure 1: Ten States With the Largest Negative Equity Shares

Source: CoreLogic REAS Q1 2021
© 2021 CoreLogic,Inc., All rights reserved.

Negative equity shares vary greatly by metro area. Among the 10 large metro areas shown in figure 2, San Francisco had the lowest negative equity share (0.7%) and Chicago the highest (6.1%).

Figure 2: Average Amount of Negative Equity By CBSA (Q1 2021)
Average Amount of Negative Equity ($)

Figure 2: Average Amount of Negative Equity By CBSA (Q1 2021)

Source: CoreLogic Q1 2021
© 2021 CoreLogic,Inc., All rights reserved.

Figure 2 also shows that he average amount of negative equity is inversely related to the negative equity share. The average underwater amount in San Francisco was $811,000, almost 10 times the average underwater amount in Miami.

Home equity reached new highs in early 2021 as home prices increased by double digits in March. This increase in home equity will buffer homeowners from hardships caused by the pandemic.

©2021 CoreLogic, Inc. All rights reserved.

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