CoreLogic reported that homeowners with mortgages saw their equity go up 32.2% year-over-year in the first quarter of 2022. That was a collective equity gain of $3.8 trillion in the first quarter! Per borrower, this equated to $63,600 in a year and made up 60% of the mortgages on properties around the country. Homeowners in California, Hawaii and Washington witnessed an increase in equity of more than $100,000 in the first quarter of the year compared to the first quarter of 2021.
“This has led to the largest one-year gain in average home equity wealth for owners and is expected to spur a record amount of home-improvement spending this year,” Patrick Dodd, CEO of CoreLogic said in a statement.
For the country, this meant that 62,000 homeowners which had lost their equity, regained their equity because of the spike in home prices. This was up compared to the previous quarter’s report from CoreLogic. Unfortunately, CoreLogic also says because of this explosive pace of home price appreciation will cause a cool down by March 2023.
This trend has caused the underwater mortgage gap to close a little more. CoreLogic reported that only 2% of homeowners with mortgages were still underwater in the first quarter of 2022. Underwater mortgages are seen as mortgages with negative equity, where the borrower owes more on their mortgage than their home is worth. From the first quarter of 2021 to the first quarter of 2022 negative equity dropped by 5.3%.
