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The housing bull market has peaked for now. Recent home price declines are leading to decreased tappable equity for homeowners.

A new CoreLogic Homeowner Equity Insights report shows homeowners with mortgages (roughly 63% of all properties) saw their equity decrease by a total of $108.4 billion in the first quarter of 2023 versus the same period last year, a loss of 0.7% year-over-year (or about $5,400 per borrower). Even though it was a small loss of equity, it was the first loss since 2012. 

Home equity trends for the quarter show Hawaii, Florida, and Rhode Island had the most significant gains of $24,900, $24,500, and $23,700, respectively. Meanwhile, thirteen states and one district recorded annual equity losses: Arizona, California, Colorado, Idaho, Louisiana, Massachusetts, Minnesota, Montana, Nevada, New York, Oregon, Utah, Washington, and Washington, DC.

Despite the declines, the average US homeowner now has more than $274,000 in equity — up significantly from $182,000 before the pandemic. However, the trend is reversing. 

In recent months, we've noted "US Home Price Growth Slowest In A Decade, San Francisco Crashes" and "US Home Prices Show Annual Decline For First Time Since 2012." The Federal Reserve has put a chill in the housing market with the most aggressive rate hikes in a generation to combat decades-high inflation. 

Still, home prices have yet to crash, and that's a function of tight supply. Those chasing the real estate market during the COVID-19 boom in the western half of the US are experiencing the worst declines in equity and home prices.

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