A bifurcated housing market: The average Idaho homeowner sees equity decline by $21K while the average Florida homeowner gains $49K by 2022

packing after mortgage rates rose to 6%, Charlie Alvarez put his home in South Carolina on the market in July 2022. He needs to sell for personal reasons. He was also worried that by listing afterwards mortgage payments that spiked, he will lose the price bubbles that hit the top of the Pandemic Housing Boom just a few months.

“At first, I thought we would have problems, I thought we would sell for $350,000… But, we didn’t have a week in the market, and there was an offer,” said Alvarez. luck.

Alvarez got his list price of $465,000 for his two-story craftsman-style home in Taylors, SC.

Even so the ongoing collapse of the house SAW the national house price decreased slightly from the peaks hit during the Pandemic Housing Boom, most homeowners remain big time. In fact, among the 46 states tracked by CoreLogic42 states saw average home equity levels increase between the fourth quarter of 2021 and the fourth quarter of 2022. Only California, Idaho, Utah, and Washington saw average levels in equity that fell between those year-to-year periods.

“As US home price growth continues its slow, steady decline in the final months of 2022, home equity trends naturally follow suit. In the fourth quarter of 2022, the average borrower earned approx. $14,300 in equity per year, compared to the $63,100 gain seen in the first quarter of 2022,” wrote Selma Hepp, chief economist at CoreLogic, in a statement provided to luck.

The average Florida homeowner saw the biggest gains, with average equity increasing $49,032 between the fourth quarter of 2021 and the fourth quarter of 2022. Meanwhile, the average Idaho homeowners saw the biggest decline, with average equity falling $21,352 during that period.

Until February, two-thirds of the region’s housing markets tracked by Zillow saw local home prices fall from their 2022 peaks. However, only 39 of the nation’s 400 largest major markets saw local home prices fall by more than 5% on a seasonally adjusted basis. Almost all of the those hard hit markets are in the West. (Here is the house price data for the 400 largest housing markets in the country).

“As equity gains contract in late 2022 due to declining home prices in some regions, U.S. homeowners on average will have about $270,000 more in equity than they had at the start of the pandemic,” Hepp wrote. “Even in Idaho, where borrowers are most vulnerable to losses, the average homeowner with a mortgage has about $250,000 in home equity remaining.”

Let’s be clear: These year-over-year equity gains do not mean the US housing market is back in boom-mode.

In fact, almost all of these equity gains occurred in the first few months of 2022 (see chart below), when the Pandemic Housing Boom—pushing up national house prices by 41% between March 2020 and June 2022—is in its final innings.

For 124 consecutive months, from the bottom of the previous correction in February 2012 to the peak of Pandemic Housing Boom in June 2022, the seasonally adjusted Case-Shiller National Home Price Index reported positive increases in house prices. But the start of the ongoing decline in housing, it is seen that the series will end in the second half of 2022. In fact, US house prices fell every month in the second half of 2022, and closed the year was 2.7% below the June peak.

On a year-over-year basis, national home prices still rose 5.8%. However, it is likely that national home prices, as measured by Case-Shiller, will turn negative on a year-over-year basis in the coming months as the high valuation months from early in 2022 falls out of the 12-month window. When that happens, Hepp says, people shouldn’t overreact.

“Some exurban regions that became more popular during the COVID-19 pandemic saw prices jump and affordability erode during that time, but these areas are now seeing major corrections. And while the decline in price is likely to continue in the spring of 2023, when the market may see some year-on-year reductions, the recent reduction in mortgage rates has stimulated buyer demand and may result in a more optimistic time to buy a home than most people expect,” wrote Hepp.

On a national basis, CoreLogic expects US home prices to turn negative on a year-over-year basis in April. After that, CoreLogic expects national home prices to rebound and end 2023 back to the peak level reached in June 2022. (Here’s a round-up in other national prices of house prices).


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