Home Equity Update for Q1 2021

Key Highlights

• Average equity gain of $33,400/borrower highest in at least 10 years
• National negative equity share was 2.6% in Q1 2021, lowest in over 10 year

Latest CoreLogic Report on Home Equity in Q1 2021

Home equity soared to an average gain of $33,400 per borrower during Q1 2021 due to double-digit home price gains.  This average gain of $33,400 or +19.6% y/y  per borrower (62% of all homeowners) is the highest gain in home equity in at least 10 years, according to the latest CoreLogic Homeowner Equity Report.  The total gain in home equity increases hit nearly $1.9T since Q1 2020. 

On the flip side of the ledger, CoreLogic indicated that the nationwide negative equity share during Q1 2021 was just 2.6% of all homes with a mortgage.  This 2.6% share is the lowest share of homes with negative equity since CoreLogic began tracking this data point during Q3 2009

On an annual basis, the number of properties with negative equity decreased by approximately -450,000 properties or -24.0% from Q1 2020 to Q1 2021

Escalating Home Prices and Soaring Home Equity Definitely Relate

Existing homeowners most definitely experienced a boost in their home equity as home prices continued to accelerate over 2020.

For some homeowners in dire straights and/or in forbearance, home borrowers can tap into their growing home equity and decide to sell their home rather than losing it via a potential foreclosure.

Ten States with Largest Negative Equity Shares in Q1 2021

Obviously, states with the highest shares of negative equity are states that experienced low home price appreciation.  Also obviously, places with high negative equity are at higher risk of foreclosure and/or distressed sales.

The national rate of negative home equity came in at 2.6%, according to CoreLogic.

Here are the states with the highest rates of negative equity:

Louisiana – 8.3% of mortgages with negative equity

Iowa – 5.6% of mortgages with negative equity

Illinois – 5.4% of mortgages with negative equity

Oklahoma – 4.9%

Connecticut – 4.7%

Arkansas – 4.6%

North Dakota – 4.2%

New York – 4%

Kentucky – 3.9%

Delaware – 3.8%

Metros with Least Amounts of Negative Home Equity in Q1 2021

Metros with the least amounts of tend to be clustered in the Western regions of the US.

Take a look:

San Francisco – 0.7%

Los Angeles – 0.8%

Denver – 1.3%

Houston – 1.6%

Las Vegas – 2.0%

Washington DC – 2.1%

Boston – 2.2%

New York – 3.3%

Miami – 5.5%

Chicago – 6.1%

You’ll also note that Idaho, California and Washington State experienced the largest average equity gains of $70,900, $69,600 and $65,800 respectively in Q1 2021.

Thanks to CoreLogic.

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