Home equity data and statistics: Why they matter to homeowners
Andrew Dehan
8 min read
Key takeaways
Anyone who owns a home has equity in it — it’s the portion of the property that you own outright, as opposed to being financed or encumbered with debt in some way.
Your home equity percentage increases as you pay down your mortgage. It can also rise if the home’s worth increases, due to improvements you make or a general uptick in local property values.
Negative equity means you owe more on your home than it’s worth, which is problematic if you want to sell, refinance or borrow against your ownership stake.
You’ve been hearing a lot about home equity lately for one big reason: There’s a lot more of it. As home prices boomed throughout the pandemic, many homeowners enjoyed some massive appreciation in the size and worth of their ownership stake in their properties.
As a result, the collective value of U.S. households’ equity is nearly $35 trillion — an unprecedented sum. The average mortgage-holding homeowner has approximately $311,000 in equity, according to CoreLogic.
Let’s delve more deeply into home equity statistics — and why they’re significant to anyone who owns a home.
Home equity key terms
Home equity
The difference between how much your house is worth and how much you still owe on your mortgage. For example, if your house is worth $500,000, and you still owe $100,000, you have $400,000 of equity.
Home equity loan
A fixed-rate, lump-sum loan using your home as collateral, also known as a second mortgage. Requirements vary among lenders, but they typically only allow you to borrow up to a maximum of 85 percent of the home’s value (including the amount owed on your first mortgage).
Home equity line of credit (HELOC)
Another way of borrowing against your home equity that uses your home as collateral. Rather than a lump sum of money, it offers a revolving credit line (like on a credit card) that you can draw funds from as you need them, at a variable rate. As the Federal Reserve adjusts its benchmark rate, HELOC rates move up and down, too.
Negative equity
The status of a homeowner whose outstanding mortgage debt is larger than the property’s current worth. For example, if your house’s fair market value is $300,000, but you owe your lender $310,000, you have negative equity.
Current homeowner equity data and statistics
Note: Most figures are as of the third quarter of 2024.
About 48.3% of mortgaged residences are “equity rich,” meaning their outstanding loan balance is less than half the home’s value (and the owner owns at least 50% of the home outright).
The average mortgage-holding homeowner gained $5,700 in equity between Q3 2023 and Q3 2024.
Of the average $311,000 in equity held by mortgage-holding homeowners, $203,000 is tappable (that is, can be withdrawn while still maintaining a healthy 20% stake in the home).
Homeowners in the Northeastern states enjoyed the largest year-over-year home equity gains: Rhode Island ($43K), New Jersey ($43K), and New York ($37K).
Homeowners in the West tended to fare less well. The three states posting the biggest annual equity losses: Hawaii (-$34K), Colorado (-$17K), and Idaho (-$13K).
The national aggregate value of negative equity is $324 billion — a $9.1 billion decrease year-over-year.
Underwater properties represent 1.8% of all residential mortgages. The number of underwater mortgages decreased by 3% year-over-year.
Home equity lending has increased to its highest level since early 2008: New home equity loans increased 40% year-over-year in 2024 and, in the first two quarters, lenders originated more than 333,000 new home equity loans. In the third quarter of 2024, HELOC originations rose nearly 6% year-over-year.
Why is home equity important?
Home equity refers to the portion of your property that you own outright, free and clear of any debt (“equity” being financial lingo for “ownership”). Anyone who owns a home — whether purchased with cash or financed with a mortgage — has some level of equity in it. If you paid for your place all in cash or have paid off your mortgage entirely, you have 100 percent equity. Conversely, if you made a 20 percent down payment and borrowed all the rest for the purchase, you have only 20 percent equity at the start.
If your mortgage is still outstanding, your home equity is the difference between how much your house is worth and how much you have left to pay on your mortgage. If you still owed your mortgage lender $50,000, say, and your home’s value is $300,000, you’d have $250,000 in equity, approximately.
There are tools, like Bankrate’s Home Equity Calculator, that can give you a more precise idea of your current equity level and its dollar value. You might want to use them in conjunction with a professional’s home appraisal.
Understanding how much home equity you have can give you a rough idea of how much of the sales proceeds you’ll receive if you sell the property (after you pay off your mortgage and transaction costs, of course). You can also borrow against your equity stake with a home equity loan or a line of credit (HELOC). These products can help you pay for large expenses — they’re particularly popular to pay for home repairs and renovations — at a relatively lower interest rate compared to other forms of financing.
Home equity over the past 5 years
By December 2024, the median price had climbed to $364,750. Going further back, the median home price has more than doubled since 2011.
Higher home prices equal higher home values, which means bigger (and more valuable) home equity stakes. In certain states, homeowners have seen especially large gains in their equity levels. Here are where the biggest equity increases occurred as of Q3 2024, based on CoreLogic’s research:
Rhode Island –$43,000
New Jersey – $43,000
New York – $37,000
Maine – $25,000
Illinois –$23,000
Virginia – $22,000
With home equity steadily rising over the past five years across 90 percent of major metro areas, American homeowners have gained significant wealth, averaging nearly $150,000, according to the National Association of Realtors (NAR). While price growth has begun to slow recently, equity continues to be an extremely valuable commodity for homeowners.
Every time you make a mortgage payment, you are chipping away at the loan’s balance (the part of the home your lender owns) and augmenting your equity (the part you own). At the start of your mortgage term, a greater percentage of your payments goes towards interest at first, but shifts more towards principal as the years go on. And the amount that goes toward principal translates to an increase in your equity stake.
If you can make biweekly mortgage payments or an extra payment each year, you’ll accelerate your equity-building efforts.
2. Upgrade your home
Renovations to your home, such as modernizing the bathrooms or adding an in-law suite, often enhance the property’s worth and marketability. Since the size of your mortgage doesn’t change — your lender doesn’t get to share in the home’s appreciation — this increase in value directly accrues to your side of the ownership stake.
3. Stay attuned to local market trends
Your home’s equity can also increase without your intervention. As certain neighborhoods, cities and regions become more attractive, residents benefit, as the surge in interest and purchases elevates asking prices and property values in general.
What is negative equity?
Homeowners have negative equity — also known as being underwater or upside down — when they owe more on their mortgage than their home is worth. For example, if you had an outstanding loan balance of $250,000 and your home appraised for $235,000, you’d be in a state of negative equity.
It’s not a great state to be in. If you decided to sell the property, you wouldn’t make enough from the deal to pay off your mortgage. In fact, it would actually cost you money: Since your debt is bigger than the home’s value, you would have to make up the difference and pay your lender back at the closing.
Refinancing with negative equity is also a problem, because lenders usually won’t let you take out a new loan without any equity in your home. And forget about home equity loans or HELOCs: You can’t borrow against a non-existent stake. Instead, you may need to wait until your home value increases or until you’ve re-paid enough of your mortgage to reach positive equity again.
Negative equity isn’t a common issue these days, thanks to the huge growth in home values. In fact, the amount of underwater homes in their mortgage was down by 3 percent from Q3 2023 to Q3 2024, according to CoreLogic — and at record lows: less than 2 percent of all mortgaged residences.
990,000
The number of underwater U.S. homes as of Q3 2024. That’s about 30,000 less than the year before.
Understanding how home equity works, and how to leverage it, is important for any homeowner. The potential to build equity is one of the primary reasons homeownership is so attractive to so many, and remains a steadfast part of the American Dream. Handing over rent money to a landlord every month does nothing to build your long-term wealth, but making monthly mortgage payments to a lender allows you to acquire an asset — an asset that you can eventually tap into or pass down to descendants.
