Homeowners enjoyed the largest year-over-year home equity gain in six years during the third quarter.

Americans with mortgages (roughly 63% of all properties) saw their home equity increase by an average of $17,000 between July and September 2020 as compared to the same quarter a year ago, according to a quarterly report from mortgage data and analytics firm CoreLogic.

Home equity for those homeowners rose by a total of $1 trillion over the year, with the average home equity in the U.S. sitting at $194,000 by the end of September.

“One of the biggest drivers of home equity is price growth over the last several months,” CoreLogic Chief Economist Dr. Frank Nothaft told Yahoo Money. “We saw a huge shortage of homes and the Federal Reserve dropping mortgage interest rates, which led to an acceleration of home prices.”

‘Taking this opportunity to lock in low mortgage rates’

In a pandemic when millions of Americans have lost their jobs, the equity increases were largely surprising and have favored certain markets over others.

“The single largest effect of the pandemic on the housing market is the opposite of what we all expected in April,” Digital Risk President Jeff Taylor told Yahoo Money. “Due to stay-at-home orders, people have been driven to invest in their single-family homes to make their living spaces more functional to fit the new normal, especially in suburban areas.”

States such as Washington, California, and Idaho were among the top five states with the largest year-over-year equity gains. Homeowners in Washington saw a $36,000 increase in home equity wealth, while for California and Idaho those gains were $34,000 and $29,000, respectively.

“California expats who were in high cost markets are now looking for more space and with flexibility in technology jobs to work remotely,” Nothaft said. “They’re taking this opportunity to lock in low mortgage rates and move to areas like Boise, Idaho which has a burgeoning employment sector.”

An earlier study by Mphasis Digital Risk, a mortgage underwriting firm, found that 4 in 10 Americans wanted to buy a home during the pandemic, with more than half citing office space as a top desire and 45% wanting additional space for their children.

The increase in home equity would likely continue into the new year as rates remain at or near record lows.

“I expect home equity to increase, in some locations, by as much as 50% in 2021 year over year,” Taylor said. “That would result in $1.5 trillion in home equity and a 10% year-over-year increase in home price appreciation.”

Value of rentals also rising

The National Home Rental Council’s rental market index reached a score of 74.4 out of 100 in the third quarter, the second straight record high. A score above 50 signals a strong market, based on leasing activity, household occupancy, and expected demand.