Connecticut, New Jersey lead the nation for home equity growth

Rising home prices were a stressor for buyers who wanted to enter the real estate market in 2024. But some existing homeowners and investors may feel differently as a trend of home equity growth was found across 45 states.

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

Unison’s report highlighted major growth for U.S. home prices. The national market experienced a 4.5% annualized increase in home prices as of July. The report noted that most of the growth “occurred in the first half of 2024, with the index rising by 4.7% year-to-date.”

Home equity also grew based on higher prices, reaching $35 trillion at the end of the second quarter. The aggregate value of homes surpassed $48 trillion. Comparatively, Unison highlighted U.S. home equity of $31 trillion and $44 trillion in total value as of Q2 2023.

“The 2024 housing market has demonstrated significant growth and resilience, overcoming headwinds from high interest rates to achieve a remarkable surge in home equity,” Unison noted in the report.

“Our report reflects the dynamic changes in the housing market and provides an in-depth look at how regional differences can impact homeowner equity,” Unison President Ryan Downs said in a statement. “With home equity reaching new heights, our findings underscore the critical role it plays in household wealth and the importance of innovative financial solutions.”

Unison also analyzed equity growth on a regional basis. Since September 2023, it found that home equity growth has been positive in 45 states. Three states in the Northeast and Mid-Atlantic regions experienced the highest growth rates. Connecticut led the nation 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 median home equity values of $564,728 and $497,558, respectively.

Additionally, the report analyzes home equity performance in Core Based Statistical Areas (CBSAs) — a term for adjacent counties integrated with a core urban area. The Dover, Delaware area experienced 35.7% annualized 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 equity declines among all states. Oklahoma had the lowest median home equity value at $118,331 — roughly one-fifth of Hawaii’s median value. And among the CSBAs analyzed, New Mexico had the sharpest declines, with three areas dropping by more than 30%.

The report points out that home equity accounted for one-fifth of household net worth in the second quarter of 2024. With rapid price increases and equity gains, Unison urged homeowners to “consider realizing some of these gains, especially if they have liquidity needs.”