Cotality: Home Equity Picture Mixed in Q2

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Cotality, Irvine, Calif., released its Homeowner Equity Report for Q2, reporting that the average U.S. homeowner lost approximately $9,200 in equity over the past year.

However, the average homeowner still has about $307,000 in accumulated equity.

“The average borrower equity is approximately $307,000, representing the third highest figure in recorded history and an increase of $124,000 compared to the first quarter of 2020 at the start of the pandemic. Even in markets where recent price declines have pulled down average equity, such as the District of Columbia and Florida, borrowers on average hold almost $350,000 and $290,000 in equity, respectively,” said Selma Hepp, Cotality chief economist.

Borrower equity fell by $141.5 billion year-over-year, equal to 0.8%. Total net homeowner equity for borrowers with a mortgage totaled $17.5 trillion in Q2.

The recent drop also follows a stretch of equity gains for homeowners. On average, a homeowner gained $25,000 in 2023 and $4,500 in 2024.

The changes in equity have increased the share of mortgaged homes with negative equity from 1.7% to 2% year-over-year. The historic low is 1.7%, dating back to Q2 2024.

But, quarter-over-quarter, the number of homes with negative equity fell by 3.3%. That coincides with the spring homebuying season when prices typically rise, Cotality noted.

“Home prices this year have experienced the slowest rate of growth since the Great Financial Crisis of 2008. As appreciation remains modest and even declines in some markets, home equity accumulation is projected to follow suit. With the reduced pace of appreciation, seasonal fluctuations in home prices will have a pronounced impact on equity changes. Recent declines also highlight the benefits of accessible equity as some homeowners leveraging their equity for alternative financial purposes,” Hepp said.