Economist Says 2017 Home Equity Growth Due to Home Price Growth

According to CoreLogic, mortgage-holding homeowners' home equity rose by about 12 percent in 2017, the biggest equity gain since 2013.

"Home-price growth has been the primary driver of home-equity wealth creation," says Frank Nothaft, chief economist at CoreLogic. "Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years." CNBC reports that due to rising interest rates, fewer homeowners are likely to withdraw cash through refinancing their primary mortgage, and would rather draw the money from other investments.

That [increase] comes to an average of $15,000 per homeowner and a collective gain of $908.4 billion. States like California and Washington saw even higher price growth, so homeowners in those states gained an average of $44,000 and $40,000, respectively. In Louisiana, homeowners saw no growth at all, and in Oklahoma, barely $2,000 in additional equity.

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