Homeowners see rise in equity

Across the country, for the year of 2018, the average homeowner increased their equity by about $9,700. In Pennsylvania, it was around $7,000.

According to CoreLogic’s Homeowner Equity Insights report, equity for homeowners with a mortgage rose 8.1 percent or $678.4 billion year-to-year for the final quarter of 2018. Nearly two-thirds of properties in the country have a mortgage.

However, homes with a negative equity did see a slight increase of 1.6 percent from the third to fourth quarter, the first quarterly increase in three years. But the percentage of properties with a mortgage with negative equity decreased year-to-year 14 percent, or about 364,000 homes.

In Pennsylvania for the fourth quarter of 2018, the share of negative equity was 3.7 percent, considered a moderate number for the nation.

“Our forecast for the CoreLogic Home Price Index predicts there will be a 4.5 percent increase in our national index from December 2018 to the end of 2019. If all homes experience this gain, this would lift about 350,000 homeowners from being underwater and restore positive equity,” said Frank Nothaft, chief economist for CoreLogic.

With homeowners gaining more equity, it may continue the trend of less inventory on the market, as some owners opt to stay put and instead update their homes.

“As home prices rise, significantly more people are choosing to remodel, repair or upgrade their existing homes. The increase in home equity over the past several years provides homeowners with the means to finance home remodels and repairs. With rates still ultra-low by historical standards, home-equity loans provide a low-cost method to finance home-improvement spending. These expenditures are expected to rise 5 percent in 2019,” said Frank Martell, president and CEO of CoreLogic.