American homeowners saw their equity dip by an average of $9,200 over the past year as rising interest rates cooled the housing market, but experts say the decline is more of a reset than a collapse.
Homeowner Equity Falls $141 Billion Amid Rising Rates
Home equity, the difference between what a homeowner owes and what their property is worth, fell 0.8% year-over-year to $17.5 trillion in the second quarter, according to housing data firm Cotality, as reported by The Fortune.
The number of homes with negative equity rose 18% to 1.15 million.
“Home equity growth has shifted from a period of explosive gains in the years surrounding 2022, into a plateau,” said Leo Pond, a real estate advisor with Four Seasons Sotheby’s International Realty.
He added, “This isn’t a collapse, but it is a market digesting …