The average homeowner gained about $15,000 in home-equity wealth during 2017, with higher-cost areas seeing the largest increases, according to the latest update from CoreLogic. Overall, last year marked the biggest average home-equity increase in four years.
Home equity refers to the difference between the value of a home and the amount of mortgage debt on the home. It’s a key component of overall household wealth. Changes in the amount of home-equity wealth are affected by local home price variations and the onging pay-down of mortgage loan balances.
For the last few years, home-value appreciation has been the major creator of wealth, although home equities took a big hit after the financial crisis of 2008 and subsequent years.
During 2017, the national CoreLogic Home Price Index rose by more than 6 percent, the largest annual increase since 2013. Likewise, home-equity wealth rose more in 2017 than any other year since 2013.
CoreLogic says that higher-priced areas experienced the biggest home equity gains. For example, the average home owner in California and Washington had a wealth gain of about $40,000, reflecting the high prices of homes in California and the rapid appreciation in Washington. In contrast, the average owner in Louisiana had little change in their housing wealth, given the much lower prices and more modest price growth.