Monday Market Update: Equity Gains Hit Nearly $2 Trillion Dollars

Home price gains have resulted in record equity gains and drastic decreases in negative equity.

The first quarter of 2021 has been a gamechanger. In addition to vaccine rollout that has supported a slow return to some sense of economic normalcy, housing demand has created price acceleration with astounding results. According to CoreLogic, “… U.S. homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over $1.9 trillion, and an average gain of $33,400 per borrower, since the first quarter of 2020.”

CoreLogic has also reported that:

| Home prices are making their sharpest gains since 2006, with double digit home price growth bolstering equity to record amounts.

| National home price gains averaged 11% in March and 13% in April.

| Borrowers with negative equity dipped to just 2.6% of all mortgages in Q1 of 2021 with an annual 24% decrease of underwater homes.

| The average homeowner has $216,000 in equity.

| Idaho has demonstrated the highest equity gains per borrower, followed very closely by California & Washington.

In Summary: “Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic. These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market, especially for older homeowners and baby boomers who’ve experienced years of price appreciation.” ~ Frank Martell, President & CEO of CoreLogic

While accelerating home prices lead many to ask if a ‘crash’ is coming, industry sources assert that home prices are NOT expected to crash. CNBC reiterates that “…there is still strong demand for housing, and the demographics support that going forward. As prices moderate, buyers will come back. Unlike the last time home prices crashed, today’s mortgage underwriting is far more stringent.”

Resources Used:

Homeowners Got $2 Trillion Richer During The First Three Months Of The Year

Nationwide Homeowner Equity Gains Hit $1.9 Trillion in Q1 2021, CoreLogic Reports

All my best,

Bobbi Decker
DRE#00607999

Broker Associate
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