Current:Home > Contact-usThe U.S. states where homeowners gained — and lost — equity in 2023-DB Wealth Institute B2 Expert Reviews
The U.S. states where homeowners gained — and lost — equity in 2023
View Date:2024-12-24 09:33:49
For the millions of Americans who own their homes, their properties are typically their biggest source of wealth. The good news? Those assets have grown in value over the past year thanks to rising home prices.
The typical American homeowner saw their home equity rise by $20,000, or 6.8%, through the end of the third quarter compared with a year earlier, according to a new analysis from real estate data firm CoreLogic.
Despite a fierce headwind in the form of the highest mortgage rates in two decades, average home prices have jumped about 9% this year, according to the National Association of Realtors. That has boosted the value of homeowners' equity, or the difference between how much a home is worth and the remaining amount due on a mortgage.
Home equity is a key to building wealth because it can provide a property owner with a way to tap the value of their home, such as through a home-equity line of credit. And when they sell their home, the property owner will pocket more money after paying off their mortgage.
"Home equity growth is driven by home price growth, and so we have had a lot of growth this year, considering everything else that is going on in the housing market," Selma Hepp, chief economist at CoreLogic, told CBS MoneyWatch.
"When people have more equity in their homes, they feel wealthier," she added.
Building home equity also provides a buffer in event of financial emergencies and gives owners another source of assets to draw on when major expenses arise, such as paying for college or making home repairs.
While the typical homeowner in most U.S. states saw their equity jump this year, property owners in some parts of the country lost ground, according to CoreLogic.
Property owners in Texas on average lost about $9,000 in home equity compared with a year ago, the study found.
The reason, Hepp said, is partly due to softness in the Austin real estate market, which saw a huge run-up in prices during the pandemic. Even with the dip, Texas homeowners continue to have significant equity in their properties, at an average of $217,000 each, CoreLogic noted.
Two other states saw home equity declines during the past year: New York (where equity fell $7,525 on average) and Utah (a loss of $873). Even so, homeowners in those two states have average equity of $364,000 and $348,000, respectively.
"Home price growth matters, and this is whether the changes in home prices are playing out," Hepp noted. "In Texas, we have seen home price declines, particularly this year."
States with the biggest home equity gains
Meanwhile, homeowners in Hawaii, California and Massachusetts — among the priciest states for residential real estate — saw the biggest gains in 2023.
They're also the states where property owners already have some of the highest equity in their homes. For instance, the typical Hawaii homeowner has about $717,000 in equity, while Californians on average have equity of about $634,000, CoreLogic said.
Homeownership can provide a path to greater wealth, with a Federal Reserve report noting that the 66% of Americans who own their own properties saw their equity rise from $139,100 in 2019 to $201,000 in 2022.
- In:
- Real Estate
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
TwitterveryGood! (7819)
Related
- Justice Department sues to block UnitedHealth Group’s $3.3 billion purchase of Amedisys
- Watch: Young fan beams after getting Jose Altuve's home run bat
- A rare but deadly mosquito virus infection has Massachusetts towns urging vigilance
- Kansas City Chiefs make Creed Humphrey highest-paid center in NFL
- IAT Community Introduce
- Why Taylor Swift Is “Blown Away” by Pals Zoë Kravitz and Sabrina Carpenter
- American Hockey League mandates neck guards to prevent cuts from skate blades
- NASA astronauts who will spend extra months at the space station are veteran Navy pilots
- Question of a lifetime: Families prepare to confront 9/11 masterminds
- Delaware election officials communicated with lieutenant governor’s office amid finance scandal
Ranking
- Tom Brady Admits He Screwed Up as a Dad to Kids With Bridget Moynahan and Gisele Bündchen
- Top workplaces: Your chance to be deemed one of the top workplaces in the US
- Here's Prince William's Next Move After Summer Break With Kate Middleton and Their Kids
- Sales tax revenue, full costs unclear if North Dakota voters legalize recreational marijuana
- Inflation ticked up in October, CPI report shows. What happens next with interest rates?
- LGBTQ advocates say Mormon church’s new transgender policies marginalize trans members
- NASCAR at Daytona summer 2024: Start time, TV, streaming, lineup for Coke Zero Sugar 400
- Search underway for Arizona woman swept away in Grand Canyon flash flood
Recommendation
-
Satellite images and documents indicate China working on nuclear propulsion for new aircraft carrier
-
Cheese has plenty of protein. But it's not 100% good for you.
-
Tony Vitello lands record contract after leading Tennessee baseball to national title
-
Jennifer Garner Steps Out With Boyfriend John Miller Amid Ben Affleck and Jennifer Lopez Divorce
-
The Office's Kate Flannery Defends John Krasinski's Sexiest Man Alive Win
-
Daunting, daring or dumb? Florida’s ‘healthy’ schedule provides obstacles and opportunities
-
Government announces more COVID-19 tests can be ordered through mail for no cost
-
Boy, 8, found dead in pond near his family's North Carolina home: 'We brought closure'