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

Published: Wednesday, December 31, 2025 at 2:15 pm

California Homeowners See Significant Equity Loss, But Still Hold Strong

A recent report analyzing homeowner equity reveals a mixed picture across the United States, with some states experiencing substantial losses while others saw gains. The study, which examined homes with mortgages across 49 states and the District of Columbia, found that California homeowners faced a significant decline in home equity over the past year.

The average homeowner in California saw their equity decrease by $33,000 in the year ending in September. This decline was more than double the national average decrease of $13,000. Florida experienced the largest drop, with an average equity loss of $37,000, followed by the District of Columbia at $36,000. Washington state also saw a considerable decrease, with equity down $32,000.

However, the report also highlighted areas of growth. The Northeast, particularly Connecticut, emerged as a strong performer, with average equity rising by $32,000. New Jersey also saw a notable increase of $28,000.

Despite the recent losses, California homeowners still possess a substantial amount of equity. The average equity for mortgaged homes in California remains at $603,000, significantly higher than the national average of $299,000. Only Hawaii boasts a higher average equity at $674,000.

In terms of percentage decline, California's 5% drop ranked 16th-worst among the states, slightly larger than the national 4% decline. Texas, Florida, and Louisiana experienced the largest percentage tumbles, each down 12%.

The report also examined the percentage of homeowners with no equity in their homes, a key indicator of potential mortgage problems. California, along with Nevada, had the lowest percentage of underwater mortgages at 0.9%. The national average was 2.2%, with Louisiana having the highest percentage at 6.9%.

BNN's Perspective: While the equity losses in some states are concerning, the overall picture suggests a resilient housing market. The significant equity held by homeowners in many areas, particularly in California, provides a financial buffer against potential economic downturns. The relatively low percentage of underwater mortgages in many states is also a positive sign. However, the varying performance across different regions underscores the importance of monitoring local market conditions and the potential impact of interest rate fluctuations.

Keywords: home equity, mortgage, California, housing market, equity decline, equity gains, Florida, Texas, Connecticut, underwater mortgages, real estate, homeowner, property values, financial cushion, economic downturn

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