The average annual home equity gain in Q3 2021 was more than three times the gain hit in 2020.

Mortgage Borrower Equity Update in Q3 2021

The average annual home equity “reward” for mortgage borrowers hit an all-time high during Q3 2021, a whopping $56,700.  This equity gain translated into an annual increase of +31%, according to the latest CoreLogic Home Equity report.  Not only was this average equity gain of $56,700 the largest average equity gain in more than 11 years, this equity gain more than three times the gain from Q3 2020.

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Extended Period of Home Price Appreciation

Let’s remember that home prices began increasing as far back as 2011 and have seen monthly increases since July 2012.  This streak of homee price appreciation has now stretched to nine years and two months.

While home price appreciation has really exploded over this last year, CoreLogic predicts that y/y home price appreciation will continue, but, it will continue at a more sustainable pace of approximately +2%.

Negative Equity Share

Likewise, the national negative equity share during Q3 2021 was 2.1%, the lowest negative equity share in more than 12 years.  CoreLogic’s equity report indicated that negative equity dropped by 70,000 properties to 1.2M from Q3 2020 to Q3 2021.

Home Equity Increases Nationwide

Despite the disruption and uncertainly caused by the COVID pandemic, home price acceleration over 2021 spurred home equity increases throughout the country.  Unlike the financial crisis that drove approximately 25% of borrowers underwater, most borrowers can tap their home equity resources and sell their homes instead of losing their homes to foreclosure.

10 States with Highest Levels of Negative Home Equity

Obviously, states with the highest shares of negative equity experienced the lowest levels of home price appreciation.  These states are at the highest risk for foreclosure and distressed sales.

  • Louisiana – 7.4%
  • Iowa – 4.9%
  • Illinois – 4.3%
  • Oklahoma – 4.2%
  • Arkansas – 3.9%
  • North Dakota – 3.5%
  • Kentucky – 3.4%
  • New York – 3.3%
  • Delaware – 3.2%
  • Wisconsin – 3.1%
  • National – 2.1%
  • Northeast share of negative home equity – 2%

Thanks to CoreLogic.



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