Rising home prices may be making things tough for would-be buyers, but they’re a huge financial boon to those who’ve already purchased their houses.
More than 60 percent of homeowners with a mortgage saw their home equity increase between the first quarter of 2016 and the first quarter of 2017, for a collective gain of $766.4 billion, according to a new report from CoreLogic.
Of those who saw their equity go up, the average gain was 11.2 percent, or $13,400. The size of equity increases varied geographically, with Washington state homeowners seeing an average increase of $37,900, while the average home equity in Alaska fell slightly.
Home equity gains have led to a boom in renovations, with borrowers using home equity lines of credit to improve their homes. Metrostudy’s Remodeling Index hit an all-time high in the first quarter, showing 4.5 percent more activity year-over-year and marking the 20th-consecutive quarter of growth.
Rising equity levels have also helped pull more underwater homeowners into positive equity positions. The total number of mortgaged properties that were underwater fell to 3.1 million homes, or 6.1 percent of mortgaged homes in the first quarter, according to CoreLogic. By comparison, in the first quarter of 2017, 4.1 million homes, or 8.1 percent of mortgaged properties, were underwater.
The percentage of underwater homeowners has been steadily declining since 2009, when more than a quarter of all mortgaged properties were worth less than the loans on them.