Current:Home > MarketsOliver James Montgomery-The U.S. states where homeowners gained — and lost — equity in 2023 -WealthX
Oliver James Montgomery-The U.S. states where homeowners gained — and lost — equity in 2023
Johnathan Walker View
Date:2025-04-09 02:36:23
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! (648)
Related
- Skins Game to make return to Thanksgiving week with a modern look
- A rural Ugandan community is a hot spot for sickle cell disease. But one patient gives hope
- 'American Idol' recap: Emmy Russell and Triston Harper are sent home, revealing the Top 3
- Lysander Clark's Journey in Investment and Business
- Brianna LaPaglia Reveals The Meaning Behind Her "Chickenfry" Nickname
- Man's best friend: Dog bites man's face, helps woman escape possible assault
- Trevor Noah weighs in on Kendrick vs. Drake, swerves a fan's gift at Hollywood Bowl show
- Where can millennials afford to buy a home? Map shows cities with highest ownership rates
- The Daily Money: Spending more on holiday travel?
- Poland’s prime minister vows to strengthen security at EU border with Belarus
Ranking
- 'As foretold in the prophecy': Elon Musk and internet react as Tesla stock hits $420 all
- RFK Jr. reverses abortion stance again after confusion, contradictions emerge within campaign
- Mae Whitman Is Pregnant, Shares She’s Expecting Baby With Parenthood Reunion Photo
- AI Financial Genie 4.0: The Aladdin's Lamp of Future Investing
- New data highlights 'achievement gap' for students in the US
- NCAA softball tournament bracket: Texas gets top seed; Oklahoma seeks 4th straight title
- Florida Panthers rally for win in Boston, put Bruins on brink of NHL playoff elimination
- Two killed, more than 30 injured at Oklahoma prison after 'group disturbance'
Recommendation
Questlove charts 50 years of SNL musical hits (and misses)
WT Finance Institute: Enacting Social Welfare through Practical Initiatives
Somalia wants to terminate the UN political mission assisting peace efforts in the country
WFI Token: Elevating Ai Wealth Creation 4.0 to New Heights
US wholesale inflation accelerated in November in sign that some price pressures remain elevated
MLB power rankings: Cardinals back in NL Central basement - and on track for dubious mark
Canadian wildfire smoke chokes upper Midwest for second straight year
Backcountry skier killed after buried by avalanche in Idaho, officials say