Home equity drops for the first time in 11 years

U.S homeowners with mortgages saw their equity decrease by 0.7 percent year-over-year during the first quarter of 2023, the first such decline since 2012, according to data released today.

That represented a combined loss of $108.4 billion, and an average loss of $5,400 per household since the first three months of 2022, according to CoreLogic in Irvine.

Homeowners with mortgages accounted for about 63 percent of the housing market.

Western states posted the largest home equity losses between the first quarter of 2022 and the first quarter of 2023: Washington (-$74,300), California (-$59,600) and Utah (-$37,700). All three of those states posted annual declines in February and March.

Not all of the data was negative: the number of underwater properties nationwide did not change between the fourth quarter of 2022 and the first quarter of this year, according to CoreLogic’s Homeowner Equity Index.

“Home equity trends closely follow home price changes,” said Selma Hepp, CoreLogic’s chief economist, in the statement.  “As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.”