California Homeowners Lose $59,600 in Equity in Past Year: What Does This Mean for the Housing Market?

California housing market has taken a hit, with homeowners losing a significant amount of equity in the past year. According to CoreLogic, the average homeowner with a mortgage in California lost $59,600 in equity, marking the first annual decline since 2012.

This trend is not unique to California, as 13 other states and the District of Columbia also experienced a drop in home equity. The average decline in the U.S. was $5,400, signaling a shift in the housing market.

The western region of the U.S. saw some of the largest declines in equity, with Washington state leading the pack with a $74,300 drop. California followed closely behind with a 9.7% decrease in equity, reflecting the cooling of what was once a red-hot housing market.

Despite these losses, homeowners with mortgages still have a significant amount of equity in their homes. In California, the average homeowner has a $558,000 gap between their home’s value and mortgage, providing a financial cushion for many.

While the decline in equity may raise concerns for some homeowners, experts like Selma Hepp, CoreLogic’s chief economist, remain optimistic about the market. Hepp notes that recent price gains suggest that homeowners are regaining some of the lost equity, indicating a potential rebound in the housing market.

Overall, the housing market in California and across the U.S. is experiencing a shift, with falling home prices creating opportunities for buyers. Despite the challenges, homeowners with mortgages still have a substantial amount of equity in their homes, providing stability in an uncertain market.