Connecticut and New Jersey lead the nation in home equity growth

Rising property prices have been a stressor for buyers looking to enter the property market in 2024. However, some existing homeowners and investors may think otherwise as a trend of home equity growth has been noted in 45 states.

Home equity solutions provider harmony released its 2024 Home Equity Report on Tuesday. The report examines home equity growth trends on a regional and national basis using data from the Case-Shiller Index and Federal Reserve to determine price increases and equity levels. Unison defines home equity as “the difference between the market value of a property and the outstanding mortgage balance.”

Unison’s report highlighted the sharp rise in property prices in the US. The national market recorded a 4.5% annual increase in house prices in July. The report said most of the growth “occurred in the first half of 2024, with the index up 4.7% year-to-date.”

Due to higher prices, home equity also grew, reaching $35 trillion at the end of the second quarter. The total value of homes exceeded $48 trillion. In comparison, Unison pointed to US home equity of $31 trillion and total value of $44 trillion in the second quarter of 2023.

“The 2024 real estate market has demonstrated significant growth and resilience, overcoming the headwinds of high interest rates and achieving notable increases in home equity,” Unison noted in the report.

“Our report reflects the dynamic changes in the real estate market and provides an in-depth look at the impact of regional differences on homeowners’ equity,” Unison President Ryan Downs said in a statement. “As home equity reaches new heights, our results highlight the critical role it plays in household wealth and the importance of innovative financial solutions.”

Unison also analyzed share growth on a regional basis. As of September 2023, home equity growth was found to be positive in 45 states. Three states in the Northeast and Mid-Atlantic region experienced the highest growth rates. Connecticut led the country with a home equity growth rate of 24.6%, followed by New Jersey (+22.3%) and Delaware (+18.3%).

Hawaii and California also stood out with the highest average home values ​​of $564,728 and $497,558, respectively.

Additionally, the report analyzes homeownership performance in Core Based Statistical Areas (CBSAs) – a term for adjacent counties that are integrated into an urban core area. The Dover, Delaware area experienced 35.7% annual home equity growth. The New Jersey areas of Trenton-Princeton (+34.6%) and Atlantic City-Hammonton (+34.5%) rounded out the top three.

Despite growth in most states, others remained stagnant or declined in 2024. Mississippi, Louisiana and Idaho saw the largest stock declines of any state. Oklahoma had the lowest average home value at $118,331 – about a fifth of Hawaii’s average value. And among the CSBAs analyzed, New Mexico saw the largest declines, with three areas seeing declines of more than 30%.

The report notes that in the second quarter of 2024, homes accounted for a fifth of household net worth. With prices and equity increases soaring, Unison urged homeowners to “consider realizing some of these gains, particularly if they have cash flow needs.”

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