Data Through Q3 2023
The CoreLogic Homeowner Equity Insights report, is published quarterly with coverage at the national, state and metro level and includes negative equity share and average equity gains. The report features an interactive view of the data using digital maps to examine CoreLogic homeowner equity analysis through the third quarter of 2023.
Negative equity, often referred to as being “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or both.
This data only includes properties with a mortgage. Non-mortgaged properties (that are owned outright) are not included.
Homeowner Equity Q3 2023
CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63% of all properties*) have seen their equity increase by a total of $1.1 trillion since the third quarter of 2022, a gain of 6.8% year over year.
*Homeownership mortgage source: 2016 American Community Survey.
In the third quarter of 2023, the total number of mortgaged residential properties with negative equity decreased by 7.7% from the second quarter of 2023 , representing 1 million homes, or 1.8% of all mortgaged properties. On a year-over-year basis, negative equity declined by 8% to 1.1 million homes, or 2% of all mortgaged properties, from the third quarter of 2022.
U.S. Borrowers See Home Equity Gains Rebound Year Over Year in Q3
U.S. annual home equity gains bounced back in the third quarter of 2023 after posting slight annual losses in the first two quarters of the year. CoreLogic’s monthly Home Price Insights numbers saw steady increases throughout the third quarter, boosting equity gains in some parts of the country. Also, slow home sales activity is resulting in fewer mortgage originations, affecting home equity and improving the nation’s overall loan-to-value ratio, which stood at 42% in the third quarter. Despite dips in the housing market, the average U.S. homeowner with a mortgage still has more than $300,000 in equity since the purchase date.
National Aggregate Value of Negative Equity: Q3 2023
The national aggregate value of negative equity was approximately $314.1 billion at the end of the third quarter of 2023. This is down quarter over quarter by approximately $22.3 billion, or 6.6%, from $336.4 billion in the second quarter of 2023 and down year over year by approximately $7.8 billion, or 2.4%, from $329.1 billion in the third quarter of 2022.
Negative equity peaked at 26% of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.
“With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year. And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up. These include Northeastern states such as Massachusetts, Rhode Island, Connecticut, New Hampshire and Maine, all of which posted about double the national gain.”
-Dr. Selma Hepp
Chief Economist for CoreLogic
National Homeowner Equity
In the third quarter of 2023, the average U.S. homeowner gained approximately $20,000 in equity during the past year.
Hawaii, California and Massachusetts experienced the largest average national equity gains, all at $45,000 or more. Three states and one district posted annual equity losses: New York, Texas, Utah and Washington, D.C.
10 Select Metros Change
CoreLogic provides homeowner equity data at the metropolitan level, in this graphic 10 of the largest cities, by housing stock are depicted.
Negative equity has seen a recent decrease across the country. Las Vegas and Los Angeles are the least challenged, with negative equity shares of all mortgages at 0.6%.
Loan-to-Value Ratio (LTV)
This chart shows national homeowner equity distribution across multiple LTV segments.
CoreLogic began reporting homeowner equity data in the first quarter of 2010; at that time, the equity picture for homeowners was rather bleak in the United States. Since then, many homes have regained equity and the outstanding balance on the majority of mortgages in this country are now equal to or in a positive position when compared to their loan balance.
CoreLogic will continue to report on homeowner equity as it continues to adjust in communities and states across the country. To learn more about homeowner equity, visit the CoreLogic Intelligence home page.
The amount of equity for each property is determined by comparing the estimated current value of the property against the mortgage debt outstanding (MDO). If the MDO is greater than the estimated value, then the property is determined to be in a negative equity position. If the estimated value is greater than the MDO, then the property is determined to be in a positive equity position. The data is first generated at the property level and aggregated to higher levels of geography. CoreLogic uses public record data as the source of the MDO, which includes more than 50 million first- and second-mortgage liens, and is adjusted for amortization and home equity utilization in order to capture the true level of MDO for each property. Only data for mortgaged residential properties that have a current estimated value are included. There are several states or jurisdictions where the public record, current value or mortgage data coverage is thin and have been excluded from the analysis. These instances account for fewer than 5% of the total U.S. population. The percentage of homeowners with a mortgage is from the 2019 American Community Survey. Data for the previous quarter was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.
CoreLogic HPI Forecasts™ are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers — “Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, metropolitan areas and ZIP Code levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2% margin of error for the index.
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