May 2022 home prices continued their upward trend, due to ongoing demand and limited supply. Also on the rise? Homeowner equity.

The CoreLogic Homeowner Equity Insights Report indicated that homeowners with mortgages saw their equity in homes increase by more than $3.8 trillion since Q1 2021. This translated to a 32.2% year-over-year increase. The CoreLogic analysts pointed out that, with a home price year-over-year increase of 20%, approximately 62,000 homeowners regained equity during the first quarter, compared to Q4 2021.

Meanwhile, negative equity decreased by 23% during the same time period, totaling 1.1 million homes. Two percent of homeowners with mortgages remained underwriter, representing a slight quarter-over-quarter decline.

Negative equity applies to borrowers who owe more on their mortgages than their houses are worth, and are caused because of a home value decline, an increase in mortgage debt and both.

CoreLogic analysts also reported the following:

• Average home equity gained between Q1 2021 and Q1 2022 was $64,000

• Homeowners in California, Hawaii and Washington led the nation in annual equity increases, gaining $141,000, $139,000 and $114,000, respectively

• Iowa and North Dakota homeowners experienced the lowest average equity gains, at $17,300 and $19,000, respectively

• U.S. homeowners with mortgages total approximately 62% of all properties nationwide

• The CoreLogic HPI Forecast projects home prices to increase 5.9% from March 2022 to March 2023

“Price growth is the key ingredient for the creation of home equity wealth. Home prices were up by 20% in March compared to one year earlier in CoreLogic’s national Home Price Index,” said Patrick Dodd, CoreLogic’s President and CEO. “This has led to the largest one-year gain in average home equity wealth for owners and is expected to spur a record amount of home-improvement spending this year.”