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U.S. homeowners saw equity in their homes drop in the first quarter of this year compared to a year ago, according to a new report.
For the first time in more than a decade, U.S. homeowners have lost equity in their home, although Ohio homeowners continued to gain ground. According to the real-estate and mortgage service CoreLogic, American homeowners with mortgages saw their home equity drop 0.7%, or an average of $5,400, from the first quarter of 2022 to the first quarter of this year. The loss, which totals $108 billion nationwide, is the first loss since early 2012, and reflects the decline in home prices seen in much of the country, although not in Columbus. Homeowners on the West Coast and throughout the West saw the biggest declines in home value, led by those in Washington state, where the average homeowner lost $74,300 in equity; California (down $59,600) and Utah (down $37,700). Other states to see declines in home equity are Arizona, Colorado, Idaho, Louisiana, Massachusetts, Minnesota, Montana, Nevada, New York and Oregon, in addition to Washington, D.C.
Homeowners in Florida and Hawaii saw the biggest gains, with an average bump of $25,000, followed by Rhode Island ($24,,000), Maine ($23,000), New Jersey ($22,000), and Connecticut ($20,000). Ohio homeowners saw a $10,000 gain in equity. In specific Ohio markets, Canton-area homeowners saw equity rise 3.2% in the first quarter, compared with a year ago, followed by Cincinnati (2.5%), Akron (2.4%), Columbus (2.2%), Toledo (2.2%), Dayton (2.1%) and Youngstown (1.7%). More: Five numbers to know about Columbus real estate in 2023 Home equity closely follows home prices, but is slightly different. Equity is the value of the home after the mortgage balance is subtracted. Someone with a home valued at $300,000 who owes $100,000 would have $200,000 in equity, for example. About 63% of American homeowners have a mortgage. Despite the rare decline in home equity, CoreLogic Chief Economist Selma Hepp noted that the sharp rise in home prices during the pandemic has largely elevated equity in recent years. “The average U.S. homeowner now has more than $274,000 in equity — up significantly from $182,000 before the pandemic,” Hepp said in a news release. “Also, while homeowners in some areas of the country who bought a property last spring have no equity as a result of price losses, forecasted home price appreciation over the next year should help many borrowers regain some of that lost equity.” jweiker@dispatch.com @JimWeiker This article originally appeared on The Columbus Dispatch: U.S. homeowners see equity drop for first time in a decade, but Ohioans see more gains
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