American homeowners with a mortgage lost about $2,300 in equity this quarter, as tappable equity declined for the first time since the housing market began its recovery.
The average homeowner with at least 20% equity now has $136,000 available to tap.
Total equity on mortgaged properties is now $9.8 trillion.
The report also revealed that 43.6 million homeowners have equity to tap, which is about 272,000 fewer homeowners than in the second quarter of 2018.
Of the nation’s 100 largest markets, 60 saw tappable equity decline.
California saw the biggest drop, accounting for nearly 75% of the total decline in tappable equity, which the report attributes rising interest rates and tightening affordability.
Ben Graboske, executive vice president of Black Knight’s data and analytics division, said softening home prices in some of the wealthiest housing markets is driving the decline.
But Graboske said it’s not all that bad.
“There is still $9.8 trillion in total home equity in the market, some $5.9 trillion of which is tappable. That’s $571 billion more than in Q3 2017, and tappable equity remains near an all-time high,” he said.
“It’s also important to remember that in general, third quarters are relatively flat as far as home prices are concerned, and that tappable equity is up on an annual basis in 98% of major metro areas,” Graboske added. “But the fact remains that affordability concerns are beginning to have an impact on home prices, particularly in more expensive markets, and as a result, on homeowner equity as well.”