U.S. Homeowners Gained $3.2 Trillion in Equity, CoreLogic Says
American mortgage holders gained $3.2 trillion of equity during 2021, according to a report from CoreLogic.
Homeowners with mortgages saw their equity increase 29% in the fourth quarter from the year-earlier period, CoreLogic said in a Thursday report. The average gain was $55,300 per homeowner, the report said.
While surging home prices have made it tough for first-time buyers to get into the market, they have been a boon to the net worth of existing homeowners. Home prices rose 18% during 2021, the biggest annual gain in 45 years of CoreLogic data, according to Frank Nothaft, the company’s chief economist.
Rising home prices are “generating a big increase in home equity wealth,” Nothaft said. “For low- and moderate-income homeowners, home equity has historically been a major source of wealth.”
Hawaii had the biggest home-equity gains among U.S. states, with the average mortgage holder seeing a $128,000 increase, the CoreLogic report said.
California was next, up $117,000, followed by Washington, with a $95,000 increase, Arizona, with a $91,000 advance, and Utah, with a gain of $88,000, the report said.
Rising prices for homes increase the value of other properties, even those that aren't for sale, because the worth of real estate is based on comparable sales – meaning, the sale price of nearby homes that are similar in size and condition.