While high home prices continue to be an obstacle for many would-be homebuyers across the country, one group has clearly benefitted. According to a new report from global analytics firm CoreLogic, U.S. homeowners with mortgages (which account for roughly 63% of all properties) saw their equity increase by 5.4% year over year during the last quarter of 2019.
The average homeowner saw their home equity rise an average of $7,300 between the fourth quarter of 2018 and the fourth quarter of 2019, according to the company’s Home Equity Report. That increase in equity represents an overall gain of almost $489 billion.
According to CoreLogic Chief Economist Dr. Frank Nothaft, the $7,300 year-over-year gain added up to a total of $177,000 in home equity wealth for the average American homeowner.
States with the largest gains include Idaho, where homeowners gained an average of $18,700 over the year; Wyoming, where homeowners gained an average of $17,900; and Arizona, where homeowners gained an average of $14,800.
Massachusetts wasn’t far behind these states. Here, homeowners gained $14,000 in equity from the last quarter of 2018 to the last quarter of 2019, almost double the national average.
The nationwide negative equity share, which measures the proportion of homeowners who are underwater, was 3.5% of all homes with a mortgage for the fourth quarter of 2019, a decrease of 4.8% year over year. The number of underwater properties decreased by 330,000 from the fourth quarter of 2018 to the fourth quarter of 2019.
“The number of underwater homes in the United States has fallen to the lowest level since the Great Recession,” Nothaft said. “In general, western states and those in the mid-Atlantic region are registering strong gains, compared to states in the Northeast and upper Midwest.”
In Massachusetts, the negative equity share in the fourth quarter of 2019 was 3.3%, just under the national average of 3.5%. In Boston, it was even lower, at 3.1%.
For the majority of Americans, however, home equity wealth is up, and that’s good news for the economy right now, said Nothaft. “With unprecedented low rates and constrained supply, the housing market should continue to do well. Viewed against the backdrop of the recent stock market volatility, steady gains in home equity are a welcome source of stability.”