Current:Home > FinanceThe U.S. states where homeowners gained — and lost — equity in 2023-Angel Dreamer Wealth Society D1 Reviews & Insights
The U.S. states where homeowners gained — and lost — equity in 2023
View Date:2024-12-23 22:09:14
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! (97)
Related
- Firefighters make progress, but Southern California wildfire rages on
- Tomorrow X Together's Taylor Swift Crush Is Sweeter Than Fiction
- Microsoft’s bid for Activision gets UK approval. It removes the last hurdle to the gaming deal
- 5 Things podcast: Death tolls rise in Israel and Gaza, online hate, nomination for Speaker
- The charming Russian scene-stealers of 'Anora' are also real-life best friends
- Climate change raises concerns for future of marathons and runner safety: Analysis
- African leaders react as Israel declares war on Hamas
- Japan’s government asks a court to revoke the legal religious status of the Unification Church
- Mike Tyson vs. Jake Paul stirs debate: Is this a legitimate fight?
- North Korea raises specter of nuclear strike over US aircraft carrier’s arrival in South Korea
Ranking
- Tua Tagovailoa playing with confidence as Miami Dolphins hope MNF win can spark run
- Oklahoma judge sent over 500 texts during murder trial, including messages mocking prosecutor, calling witness liar
- In Beirut, Iran’s foreign minister warns war could spread if Israeli bombardment of Gaza continues
- 'Anatomy of a Fall' dissects a marriage and, maybe, a murder
- Colts' Kenny Moore II ridicules team's effort in loss to Bills
- AP PHOTOS: Surge in gang violence upends life in Ecuador
- Hamas training videos, posted months ago, foreshadowed assault on Israel
- Love Is Blind Season 5 Reunion: First Look Photos Reveal Which Women Are Attending
Recommendation
-
Don't Miss This Sweet Moment Between Taylor Swift and Travis Kelce's Dads at the Kansas City Chiefs Game
-
On his first foreign trip this year, Putin calls for ex-Soviet states to expand influence
-
No more passwords? Google looks to make passwords obsolete with passkeys
-
Troye Sivan harnesses ‘levity and fun’ to fuel third full album, ‘Something to Give Each Other’
-
South Carolina to take a break from executions for the holidays
-
Mahomes throws TD pass, Kelce has big game with Swift watching again as Chiefs beat Broncos 19-8
-
Muslims gather at mosques for first Friday prayers since Israel-Hamas war started
-
New species of ancient scraper tooth shark identified at Mammoth Cave in Kentucky