Earlier this week the NAR reported that $8.3 trillion in housing wealth was created between 2010 and 2020. That equates to an impressive $830 billion a year. However, 2021 said hold my beer…
According to the latest CoreLogic Homeowner Equity report, the amount of equity in mortgaged real estate increased by more than $3.2 trillion in Q4 2021, an annual increase of 29.3%…(CoreLogic)
- Average annual equity gain of $55,300 per borrower in Q4 2021 was more than two times the gain from a year earlier.
- This biggest increase was in Hawaii with the average year-over-year equity gain coming in at $128k followed by California (+117k) and Washington (+95k).
Dr. Frank Nothaft, chief economist for CoreLogic, said these equity gains are most helpful to low and moderate-income homeowners…
- “Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth…For low- and moderate-income homeowners, home equity has historically been a major source of wealth.”
As equity increases, especially at this rate, the chances of a homeowner being in a home with negative equity drops preciously. In the fourth quarter of 2021, 1.1 million homes, or 2.1% of all mortgaged properties, were in negative equity. This is the lowest level in over 12 years.
- Y-O-Y: Homeowners with negative equity fell by 24.9%, or approximately 380,000 properties, by the fourth quarter of 2021.
Looking forward, if home prices increase by 5%, which they probably almost have, 141,000 homes would regain equity dropping the number of negative equity homeowners under one million.