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Both Positive & Negative Equity Grow In US Housing Market 


Inflation and monetary policy continue to split the economy, individual finances, and the US housing market. 

This is perhaps most notably showing up with both positive home equity, and negative equity growing at the same time. 

So, where is the money being made? Where is it being drained from? 

California & Florida Top States For Home Appreciation

According to CoreLogic, the 63% of US homes with mortgages have seen their equity grow by $3.6T over the past year. That’s up by 27.8% between Q2 2021 and Q2 2022.

The greatest gains have been seen in California and Florida, which far outpace other states. 

In many cases, homeowners are seeing their home appreciation outperform average salaries from jobs each year. 

Midwest & Northeast See More Underwater Mortgages

At the same time, negative equity has also been growing as home values soften in some areas. 

Homeowners were underwater in negative equity by over $302B at the end of the second quarter. An increase of almost 12% since Q2 last year. 

Even in the hardest hit states, less than half the number of homeowners are underwater than in 2009. At least for now. 

The states with the most negative equity appear centered in the Midwest, followed by the Northeast. 

The Financial Shift

Inflation, which is now hitting even greater highs, along with rocketing interest rates is fueling this disparity even more. 

The middle class appears to be under a blitz of financial hits, from inflation in groceries and insurance and housing costs, to new and higher taxes. 

The low end of the market is well insulated thanks to various forms of stimulus and government assistance and performing essential jobs. Those with food stamps and Section 8 housing vouchers don’t even notice prices going up. It is not coming out of their pockets. 

The luxury market is also doing well as business owners benefit from inflation, higher prices, and increased business valuations. They are also very protected from inflation. If their grocery, insurance, or utility bills go up by a few hundred dollars a month, they may barely notice. 

However, what investors need to pay attention to is this shift which appears to be a part of a larger cycle. In which old hubs like NY may be seeing their peaks come to an end. Manhattan recently saw a 40% decrease in home sales. With NYC losing 12% of its high-net-worth residents in just the first six months of 2022. 

Along with this migration are opportunities in related sectors, such as self-storage. 


Some homeowners are making more in equity appreciation than working at jobs. Yet, others are already falling into negative equity situations.

This situation is likely to be compounded by current economic trends, in addition to some banks pushing zero down mortgage loans, and more HELOCs. 

There are a lot of opportunities for investors. Some will lose it all by investing in failing areas. While others will continue to realize strong gains, by paying attention to these shifts, and the migration of wealth. 

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