As home value appreciation slowed, gains in home equity for the third quarter fell to the lowest level in two years, according to CoreLogic’s homeowner equity report.
Homeowners with mortgages, which makes up about 63% of all properties, saw their equity increase 9.4% year-over-year in the third quarter, gaining a nationwide total of $775.2 billion.
The average homeowner gained $12,400 worth of annual equity from a year ago, marking the smallest year-over-year increase in eight quarters.
“On average, homeowners saw their home equity increase again this quarter but not nearly as much as in previous quarters,” Frank Nothaft, chief economist for CoreLogic, said in a press release. “During the third quarter, homeowners gained an average of $12,400 compared to the second quarter when the average home equity wealth increase was more than $16,000. This lower year-over-year gain reflects the slowing in appreciation we’ve seen in the CoreLogic home price index.”
Home equity grew in 43 of the 50 states, but those in the West increased the most. California led all states, with its homeowners gaining an average of $36,532 in equity. Nevada joined as the only other state with gains above $30,000, as its homeowners increased their equity by an average increase of $32,556.
Negative equity declined 16% year-over-year in the third quarter to 2.2 million homes from 2.6 million, or 5% of properties with mortgages. Negative equity also dropped 4% from the prior quarter.
“The number of homes in a negative equity position have remained around 2.2 million for two consecutive quarters this year,” said Frank Martell, president and CEO of CoreLogic. “Without equity, those homeowners are unable to sell their homes and are more likely to transition from delinquency to foreclosure if they face financial distress.”