Home values in the US are stagnating, causing homeowners to lose equity. Borrower equity dropped 2.1% in the third quarter of this year, totaling $373.8 billion. This has led to a collective net equity of $17.1 trillion for homes with a mortgage, despite homeowners experiencing an average equity loss of $13,400.

Negative equity is on the rise, affecting 1.2 million homes worth less than their mortgages. Recent buyers with higher mortgage rates and peak prices are most affected. Despite a 52% increase in home values since January 2020, some markets like Boston and Chicago are still positive. Others like Los Angeles and San Francisco have seen significant losses.

Chief economist Selma Hepp warns of future risks for highly leveraged loans, tied to the strength of the US economy. Homeowners pulling equity from their homes have contributed to the equity decline. While the average equity gain per homeowner was $25,000 in 2023, it dropped to $4,900 in 2024.

Read more at CNBC: Homeowners are losing thousands in equity thanks to weakening prices