Homeowner Equity Q4 2022 reported by CoreLogic analysts shows U.S. homeowners with mortgages (roughly 63% of all properties*) have seen their equity increase by a total of $1 trillion since the fourth quarter of 2021, a gain of 7.3% year over year.
But since the pandemic, the fourth quarter of 2022 showed that the total number of mortgaged residential properties with negative equity increased by 6% from the third quarter of 2022 to 1.2 million homes, or 2.1% of all mortgaged properties. On the year-over-year basis, negative equity fell by 2% from 1.2 million homes, or 2.2% of all mortgaged properties, in the fourth quarter of 2021.
The CoreLogic HPI Forecast TM is projecting that home prices will increase by 3% from December 2022 to December 2023.
The average borrower earned about $14,300 in equity year-over-year, as compared with the $63,100 gain seen in the first quarter of 2022.
Florida homeowners benefited the most with the highest annual equity growth in the fourth quarter, of $49,000. Florida has posted the largest year-over-year home price gains in the country for the past year, according to HPI data, with prices up by 13.4% in January.
Four Western states and one district posted annual home equity decreases: Idaho (-$21,400), Washington (-$18,900), California (-$8,500), Utah (-$4,600) and Washington, D.C. (-$8,300). This partially mirrors trends recorded in CoreLogic’s latest Home Price Index (HPI), which found that Idaho, Washington and Washington, D.C. saw home price growth decline slightly year over year in January 2023.
National Aggregate Value of Negative Equity: Q4 2022
The national aggregate value of negative equity was approximately $332 billion at the end of the fourth quarter of 2022. This is up quarter over quarter by approximately $12.5 billion, or 3.9%, from $ 319.8 billion in the third quarter of 2022 and up year over year by approximately $40.3 billion, or 13.8%, from $292 billion in the fourth quarter of 2021.
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.
“While equity gains contracted in late 2022 due to home price declines in some regions, U.S. homeowners on average still have about $270,000 in equity, nearly $90,000 more than they had at the onset of the pandemic. Even in Idaho, where borrowers were the most vulnerable to losses, the typical homeowner with a mortgage still has about $250,000 in remaining home equity.
Nevertheless, with 66,000 borrowers entering negative equity in the fourth quarter, the total number of underwater properties is now approaching levels seen at the end of 2021, which was the lowest since the Great Recession. The new hot spots for equity declines are largely markets that have seen the most significant home price deceleration, including Boise, Idaho; the San Francisco Bay Area; cities in Utah; Phoenix and Austin, Texas.”
National Homeowner Equity
In the fourth quarter of 2022, the average U.S. homeowner gained approximately $14,300 in equity during the past year.
Florida, Hawaii and New Jersey experienced the largest average equity gains at $49,000, $37,100 and $35,900 respectively. Idaho, Washington, California, Utah and Washington, D.C. saw annual equity losses.
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