Homeowners with mortgages saw the equity in their homes increase by an average of 10.8 percent between this year’s third quarter and the third quarter of 2019, a recent study has found.
Nationwide, that represented a collective equity gain of approximately $1 trillion – an average of $17,000 per homeowner – during that one-year period, according to CoreLogic’s Home Equity report for the third quarter.
It was also the largest average home-equity gain since the first quarter of 2014.
Home prices continued to rise during the summer and fall despite COVID-19. Prospective homebuyers continued to compete for the low supply of homes on the market, which pushed home equity to record levels.
“Over the past year, strong home price growth has created a record level of home equity for homeowners,” said Frank Nothaft, CoreLogic’s chief economist, in the statement. “The average family with a home mortgage loan had $194,000 in home equity in the third quarter. This provides an important buffer to protect families if they experience financial difficulties.”
Approximately 1.6 million residential properties were in negative equity – more money is owed on the mortgage than the house is worth – during the third quarter of this year. That was an 18.3 percent drop – about 370,000 properties – from the third quarter of 2019, according to CoreLogic.