{"id":144102,"date":"2025-09-17T21:25:14","date_gmt":"2025-09-17T21:25:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/144102\/"},"modified":"2025-09-17T21:25:14","modified_gmt":"2025-09-17T21:25:14","slug":"the-average-american-homeowner-lost-9200-in-home-equity-during-the-last-year-its-not-a-collapse","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/144102\/","title":{"rendered":"The average American homeowner lost $9,200 in home equity during the last year. It\u2019s not a collapse"},"content":{"rendered":"

Owning a home is considered one of the best and most financially savvy a person can make\u2014if you can afford it. After all, it\u2019s the largest asset class<\/a> in the largest financial market in the world, and the 30-year mortgage is a unique American invention<\/a> that (theoretically) invites everyone into the American Dream of homeownership<\/a>.<\/p>\n

Buying a house allows people to build equity<\/a> and wealth over time by making mortgage payments that reduce the loan principal and increase the owner\u2019s stake in the home until, ideally, it\u2019s owned outright. Typically, real estate appreciates, which adds to the homeowner\u2019s wealth. In fact, owning a home during the past several years has been particularly lucrative as home prices spectactularly increased during the pandemic<\/a>.\u00a0<\/p>\n

But since the Federal Reserve hiked interest rates aggressively in 2023, home-price appreciation has been either broadly flat or falling<\/a> across the U.S., the average American homeowner lost approximately $9,200 in equity during the past year, according to data from information services company Cotality (formerly CoreLogic).<\/p>\n

\u201cHome equity growth has shifted from a period of explosive gains in the years surrounding 2022, into a plateau,\u201d Leo Pond<\/a>, a real-estate advisor with Four Seasons Sotheby\u2019s International Realty<\/a>, told Fortune. He explained the transition is driven by a combination of slowing price appreciation, elevated borrowing costs, and supply imbalances.\u00a0<\/p>\n

\u201cThis isn\u2019t a collapse, but it is a market digesting several years of unsustainable growth,\u201d he said. \u201cIt is a long-term market correction.\u201d<\/p>\n

Still, the average U.S. homeowner still has about $307,000 in accumulated home equity, according to Cotality. That\u2019s the third-highest figure on record, according to Cotality Chief Economist Selma Hepp.<\/p>\n

\u201cEven in markets where recent price declines have pulled down average equity, such as the District of Columbia and Florida, borrowers on average hold almost $350,000 and $290,000 in equity, respectively,\u201d Selma said in a statement. Home prices in Washington, D.C. and Florida dropped the most, down $34,000 and $32,000, respectively.<\/p>\n

\u201cNot to sound dismissive of $9,200, money is money [but] when compared to the six-figure equity many homeowners still hold, $9,200 doesn\u2019t seem as dire,\u201d Jules Garcia<\/a>, a real-estate agent with Coldwell Banker Warburg<\/a>, told Fortune. \u201cIt\u2019s definitely more of a concern for homeowners who bought at market peaks, are experiencing more pronounced local market declines, and have higher sale urgency.\u201d<\/p>\n

\u2018Small haircut on top of a very full head of hair\u2019<\/p>\n

Zooming out, the total homeowner equity for borrowers with a mortgage totaled $17.5 trillion in Q2<\/a> 2025, down 0.8% or $141.5 billion year over year, according to Cotality. Meanwhile, the number of homes with \u201cnegative equity,\u201d meaning when a homeowner owes more on their mortgage than the current market value of their home, increased 18% year-over-year to 1.15 million homes.\u00a0\u00a0<\/p>\n

\u201cDespite that being a concerning number, it\u2019s not a panic level just yet,\u201d Garcia said. \u201cIt\u2019s a big warning sign, but there are still many local markets showing stability.\u201d<\/p>\n

To put it in perspective, many homeowners added gobs of money to their home equity during the pandemic.<\/p>\n

\u201cMany households added far more than during the pandemic, so this adjustment is a moderate correction rather than a crisis,\u201d Pond said. \u201cFor the majority of owners with healthy loan-to-value ratios, this is a small haircut on top of a very full head of hair.\u201d<\/p>\n

Still, it\u2019s always important to continue to follow home appreciation\u2014especially in the case the homeowner is looking to sell.<\/p>\n

\u201cHome prices this year have experienced the slowest rate of growth since the Great Financial Crisis of 2008. As appreciation remains modest and even declines in some markets, home equity accumulation is projected to follow suit,\u201d Hepp said. \u201cWith the reduced pace of appreciation, seasonal fluctuations in home prices will have a pronounced impact on equity changes.\u201d\n<\/p>\n

Fortune Global Forum returns Oct. 26\u201327, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Owning a home is considered one of the best and most financially savvy a person can make\u2014if you…\n","protected":false},"author":2,"featured_media":144103,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[84,12620,4658,467,66622,25949,56,54,55],"class_list":{"0":"post-144102","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-equity","10":"tag-housing","11":"tag-markets","12":"tag-mortgage-affordability","13":"tag-mortgages","14":"tag-uk","15":"tag-united-kingdom","16":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/144102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=144102"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/144102\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/144103"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=144102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=144102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=144102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}