California owners lost $33,000 in home equity in a year

Remember that a home loan’s financial leverage can boost ownership profits over the mortgage’s life but also magnify the impact of price declines.

My trusty spreadsheet reviewed Cotality’s third-quarter report on homeowner equity, focusing on homes with mortgages and comparing home values with loan balances. Cotality tracked this measure of financial cushion for borrowers in 49 states (Vermont didn’t have enough data) and the District of Columbia.

Mortgaged homes across California lost an average $33,000 in equity in the year ended in September. That’s more than double the national decline of $13,000. Equity declined in 33 states as home values fell in many areas over the past year.

Florida had the biggest drop with average equity down $37,000. Next was the District of Columbia, off $36,000. After California, Washington state was off $32,000. Texas had the eighth-biggest dip, down $26,000.

The biggest gainers show the Northeast as the nation’s hottest housing market of late.

Connecticut’s average equity rose by $32,000 over the year; New Jersey was up $28,000; Massachusetts and Rhode Island were up $16,000;...