Cotality: Home Equity Continues to Grow

(Image courtesy of Erik Mclean/pexels.com)

Cotality, Irvine, Calif., released its latest Homeowner Equity Insights Report, finding that in Q2, total homeowner equity reached more than $34.9 trillion.

For borrowers with a mortgage, total equity reached $17.9 trillion. Outstanding mortgage debt stands at $14 trillion.

Given that total equity figure, the average loan-to-value ratio is at 44%, and only 2.1% of mortgages are underwater.

Nationwide, there is $11.5 trillion in tappable equity, an average of $310,000 per homeowner with a mortgage. That’s an increase of $6,000 from the previous quarter.

Cotality noted that it varies across the homeowner population–buyers who purchased in 2020 hold about $86,000 more in equity than buyers who bought in 2023.

“Homeowners have accumulated enormous amounts of equity, but most of it isn’t doing much,” said Thom Malone, principal economist at Cotality. “The borrowers with the most housing wealth are often the least likely to tap it. They tend to have low mortgage rates, strong cash flow and little reason to move. That means much of the country’s record home equity remains on the sidelines, while the same homeowners continue to benefit from the lower monthly payments that helped create it in the first place.”

New closed-end second mortgages and HELOC originations increased 19.8% quarter-over-quarter, from $78.2 billion to $93.7 billion.

Equity is heavily concentrated in the West and Northeast. Homeowners in Hawaii have an average of $644,000, followed by those in California with $623,000 and those in Massachusetts with $486,000.

Homeowners in Louisiana have the lowest average amount, at $109,000, followed by Oklahoma at $124,000 and Iowa at $125,000.