Given how much home prices have gone up over the last year, it’s probably not much of a shock that homeowners have gained equity as well. But just how much equity those homeowners have gained is a bit shocking.
According to a new report from CoreLogic, homeowners in the U.S. with a mortgage gained a total of $1 trillion in equity in the last year, the largest yearly equity gain in more than six years.
Per the report, homeowners saw their equity increase by 10.8% in the last year for an average of $17,000 per homeowner.
The equity increase is a result of rapidly increasing home prices, which accelerated to six-year highs over the summer and fall.
“Appreciation reached its highest level since 2014 in the third quarter of 2020 as prospective homebuyers continued to compete for the low supply of homes on the market, pushing home equity to record levels,” CoreLogic noted in its report.
However, the equity increases are not equal among all the states. The state where homeowners saw the largest equity increase is Washington, where equity rose by an average of $35,800. Homeowners in California saw their equity increase by $33,800 in the last year, while homeowners in Massachusetts gained an average of $31,200.
According to CoreLogic, the equity gains are “likely to persist” over the next few months as home demand remains elevated, pushing prices even higher.
But CoreLogic notes that home price increases may slow in the next year thanks to increasing construction and more existing homes being placed on the market. That could “moderate” the pace at which home prices and equity is rising, CoreLogic said.