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U.S. Homeowners Gained Average $57,000 in Equity in One Year

By Alex Tanzi

Historic home price growth boosted U.S. homeowner equity by 31% in the third quarter from a year ago, adding $3.2 trillion to Americans’ wealth.

That translates to an average gain of $56,700 per borrower, according to a report by property data provider CoreLogic. Housing valuations rose 17.7% in the 12 months through September, contributing to record growth in home equity.

Photo by Kindel Media from Pexels

The surge in prices will also provide a buffer against foreclosure for the 1.2 million borrowers who reached the end of forbearance in September. Those individuals may be “underwater” on their mortgages, meaning they owe more on their mortgage than their homes are currently worth.

“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth,” Frank Martell, president and CEO of CoreLogic, said in a statement Thursday.

If home prices increase by another 5%, an estimated 145,000 homes would regain equity, the statement said. Fannie Mae estimates that prices will rise 7.4% in 2022 followed by a 2.9% gain in 2023.

The wealth gains are not only creating a wealth divide between homeowners and renters, but also geographically. Equity gains on the West Coast and in the Mountain States have been most pronounced, with California borrowers seeing an average annual increase of $119,000. Meanwhile, average equity gains in North Dakota were estimated at $15,000, CoreLogic said.

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