Home equity increased nationally by $281.9 billion in the fourth quarter of 2024, an increase of 1.7% year over year, according to the latest CoreLogic Homeowner Equity Report (HER), released Thursday. But the report also noted rising negative equity in some sunbelt states, along with Oregon and Washington, D.C.
The report shows that U.S. homeowners with mortgages — roughly 61% of all properties — saw home equity increase by about $4,100 between Q4 2023 and Q4 2024, about $2,000 shy of the gain of $6,000 seen in Q3 2023.
The average borrower had $303,000 in home equity at the end of 2024.
“Housing equity growth slowed in 2024 versus 2020-2023 due to moderating price appreciation, but homeowners maintain substantial equity gains from prior years, preserving their strong financial position,” commented Selma Hepp, chief economist for CoreLogic.
Home-price appreciation, which is leveling off, is also tempering equity gains for homeowners across the U.S., resulting in clear regional divisions for equity gains. The Northeast continues to lead the way, with other areas of expanding equity encompassing the upper Midwest as well as California and Nevada.
The states that saw the largest gains were New Jersey ($39,400), Connecticut ($36,300) and Massachusetts ($34,400), while the largest losses were in Hawaii ($-28,700), Florida ($-18,100) and the District of Columbia ($-14,700).
CoreLogic says that home prices continued to be the major driver of equity shifts and markets with declining prices generally saw fallen equity in 2024. In particular, several Florida markets — such as Cape Coral, Sarasota, Lakeland and Tampa — have experienced weakening prices over the past year, which led to Florida’s average equity declining.
Amid mass government layoffs in the D.C. metro region, CoreLogic noted that borrowers in the tri-state area have accumulated between $261,000 (in Maryland), $287,000 (in Virginia) and $353,000 (in Washington D.C.), in average home equity which will help as a financial buffer but also provide a downpayment in case of a move.
However, amassing equity does not necessarily stave off the possibility of being underwater on a mortgage, the information services company pointed out. For example, in Chicago, average year-over-year equity gains were just north of $12,000 but 2.6% of properties reported negative equity.
Negative equity, also referred to as underwater or upside-down mortgages, applies to borrowers who owe more on their mortgages than their homes are currently worth.
Quarter-over-quarter, the total number of mortgage residential properties nationwide with negative equity increased by 9.3% to 1.1 million homes or 2% of all mortgaged properties. Year-over-year, negative equity increased by 7% from 1 million homes, or 1.8% of all mortgage properties.
The national aggregate value of negative equity was approximately $338 billion at the end of Q4 2024, up quarter over quarter by approximately $12.8 billion or 4% from $326 billion in Q3 2023. Year over year, it was also up by approximately $12.8 billion or 4% from $326 billion in Q3 of 2023.
