The State Where People Are Getting Rich On Their Homes

Home values have soared over the past year. In many markets, home prices have risen by double digits. The widely followed S&P Case-Shiller real estate index, which measures home prices in major metropolitan areas nationwide, showed home prices hit a record high annual gain of 19.7% in July. 

Home price increases have been driven by people leaving the largest cities because of the COVID-19 pandemic. Other drivers include solid middle- and upper-class incomes and low mortgage rates. The value of home equity for the average homeowner nationwide rose by $51,500 in the second quarter of 2021 compared with the same period a year ago. Nationwide, home equity rose 29.3%, or nearly $2.9 trillion, according to CoreLogic. The state where home equity rose the most was California.

CoreLogic’s researchers commented that consumer confidence in June 2021 had risen to its highest level since the pandemic struck. They added that thanks to the different government programs, vaccines, and home equity gains, homeowners are in a better position to remain current on their mortgage payments. Further, “the majority of borrowers that fell behind on payments have a large home equity cushion that will help them avoid foreclosure.”

To determine the states where people are getting rich on their homes, 24/7 Wall St. reviewed data from property data provider CoreLogic’s Homeowner Equity Insights report. States were ranked on their average equity gain for the second quarter of 2021. Data was not available for Mississippi, South Dakota, Vermont, and West Virginia.

The state where home equity rose the most was California at $116,300. Washington and Idaho had the second and third largest average equity gains at $102,900 and $97,000, respectively. Western states, in general, experienced the highest increases in home equity, while states in the Midwest the lowest.  

Just like it did in the first quarter, the state that did the worst was North Dakota, where home equity rose only $10,600. These are the states with highest homeownership.

It remains to be seen what will happen to home equity for the balance of the year.  For now, however, with home equity rising, the number of homeowners nationwide with negative equity — those who owe more on their home than it is worth — is decreasing, falling in the second quarter by 12% year over year. These are the most at risk housing markets.

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