Nationally, homeowner equity gained $34,300 in the third quarter of 2022, since the third quarter of 2021.
Approximately 63% of all properties in the United States hold mortgages, with equity increasing 15.8% year over year. This represents a collective gain of $2.2 trillion nationally in the third quarter of 2022.
The slowing pace of home appreciation has also caused an additional 43,000 homes to fall into negative territory.
Currently the US loan to value (LTV) averages 43.6% per property. In comparison, the LTV preceding the Great Recession translated into 71.3%.
Presently the majority of properties that are in negative equity are concentrated in the western states, such as California, Oregon and Washington state. According to the CoreLogic report, homeowners with a mortgage average more than $580,000 in home equity.
Florida leads the nation for increases in home equity. The average property in Florida gained annually $76,700, and Miami rose even higher with property owners gaining $101,000 each.
Negative Equity
Quarterly change: The number of mortgaged homes with negative equity increased in the third quarter of 2022 from the second quarter of 2022 by 4%, representing 1.1 million homes or 1.9% of all mortgaged properties.
Annual change: In 2022 just 1.1 million homes or 1.9% of all mortgaged properties were in negative equity. This represents a 9.8% decline from the 1.2 million homes or 2.2% of all mortgaged properties in negative equity from the prior year.
Not all the experts agree: as a matter of fact, they all in some way disagree with each other. According to Redfin, even if home prices declined by 4%, they project that the typical home purchased over the last two years will have gained $27,000 in property value.
What the Experts Say
Redfin is expecting home prices to decline by 4% in 2023
Realtor.com is forecasting prices will rise by 5.4% in 2023
Zillow is projecting that prices will only climb by 1.2% annually in 2023
The good news is that based upon projections provided by Black Knight, falling home prices will only cause 8% of homeowners who bought in 2022 to be underwater.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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