Based on CoreLogic's latest Homeowner Equity Report for the fourth quarter of 2021, U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase by 29.3% year over year, representing a collective equity gain of over $3.2 trillion, and an average gain of $55,300 per borrower, since the fourth quarter of 2020.
U.S. home prices rose 18% year over year in the fourth quarter of 2021, up from the 8% annual gain recorded in the fourth quarter of 2020. The appreciation helped push the national negative equity figure to the lowest in over a dozen years, with just 1.1 million homeowners underwater on their mortgages. Western state homeowners saw the biggest equity gains by dollar value, led by Hawaii, California and Washington. Year-over-year price appreciation increased by 19.1% in January 2022 according to CoreLogic's latest Home Price Index, though growth is projected to eventually slow over the next 12 months.
"Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth," said Dr. Frank Nothaft, chief economist for CoreLogic. "For low- and moderate-income homeowners, home equity has historically been a major source of wealth."
Negative equity, also referred to as underwater or upside-down mortgages, applies to borrowers who owe more on their mortgages than their homes are currently worth. As of the fourth quarter of 2021, negative equity share, and the quarter-over-quarter and year-over-year changes, were as follows: