RICHMOND, CA - JUNE 26: A construction worker hammers nails into the framing of a new home in a development June 26, 2006 in Richmond, California. (Photo by Justin Sullivan/Getty Images)
For the first time in more than a decade, the average U.S. homeowner with a mortgage has less home equity than they did a year earlier.
Among the roughly 63% of U.S. homes with a mortgage, average homeowner equity per borrower was $274,070 in the first quarter, down 1.9% from the same quarter last year, according to real estate data tracker CoreLogic.
The last time average homeowner equity fell year-over-year was in the first quarter of 2012, when the housing market was still regaining its footing after the mortgage meltdown and ensuing foreclosure crisis that helped trigger the Great Recession.
All told, U.S. homeowners with a mortgage lost a combined $108.4 billion in home equity between the first quarter of last year and the first three months of 2023, a drop of 0.7%, according to CoreLogic.
Homeowner equity, which represents the current value of the property minus what’s still owed on the mortgage, tends to rise and fall along with home prices.
In the first quarter of 2012, it averaged $75,130. It then climbed sharply in the years that followed as rock-bottom mortgage rates and a chronic shortage of properties for sale superheated the market for homes. Prices soared, and by the second quarter of last year, average U.S. homeowner equity reached a record-high $297,510, according to CoreLogic.
But starting a little over a year ago, the housing market has since slowed, limited by sharply higher mortgage rates and a thin inventory of available homes. Sales of previously occupied U.S. homes fell 23.2% in the 12 months ended in April, marking nine straight months of annual sales declines of 20% or more, according to the National Association of Realtors.
The slowdown has also weighed on home prices. Despite rising in January, the national median home price has since fallen, most recently in April, when it slid 1.7% from a year earlier to $388,800.
One bright spot for homeowners: Average homeowner equity edged up 0.9% in the first quarter compared with the fourth quarter, the firm said.
“Home equity trends closely follow home price changes,” said Selma Hepp, CoreLogic’s chief economist. “As a result, while the average amount of equity declined from a year ago, it increased from the fourth quarter of 2022, as monthly home prices growth accelerated in early 2023.”
Despite the decline in home equity, the number of homeowners who were “underwater” on their mortgage, or owing more on their loan than their home is worth, held steady between the fourth quarter and first quarter at 1.2 million homes, or about 2.1% of properties with a mortgage, CoreLogic said.
It did, however, increase 4% in the first quarter from a year earlier.
At the state level, Washington, California and Utah saw the largest average home equity decline at $74,300, $59,600 and $37,700, respectively.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.
