Homeowner equity more than double from five years ago
U.S. homeowners with mortgages, which represent roughly 63% of the total, have seen their equity increase by a total of 10.6% in the second quarter from the same period last year, showing a gain of $766 billion, according to CoreLogic.
Homeowners gained an average of $12,987 in equity from last year, with Western states leading the increase.
"Homeowner equity reached $8 trillion in the second quarter of 2017, which is more than double the level just five years ago," said Frank Martell, president and CEO of CoreLogic. "The rapid rise in homeowner equity not only reduces mortgage risk, but also supports consumer spending and economic growth."
Homeowners gained an average of $40,000 in home equity in Washington and they gained an average of $30,000 in California. Home prices in these two states drove the equity gains.
The number of mortgaged residential properties with negative equity fell to 2.8 million homes in the second quarter, representing a 10% decrease since the first quarter. From last year, negative equity declined by 21.9% from 3.6 million homes, or 7.1% of all properties with mortgages.
"Over the last 12 months, approximately 750,000 borrowers achieved positive equity," said Frank Nothaft, CoreLogic chief economist.
"Given the continued strength in home prices, CoreLogic expects home equity to rise steadily over the next year," he said.
The national aggregate value of negative equity rose by about $200 million, or 0.1%, to $284.4 billion at the end of this year's second quarter. The figure is down by about $700 million year-over-year.