The run-up in home prices gave homeowners record amounts of home equity.
Black Knight said that since May, about 1.5 trillion of that has gone missing. A lot of borrowers have lost equity.
The homeowner equity peaked at $11.5 trillion in May of last year.
At the end of September, both prices and equity were up. In February of 2020, the equity per borrower was $92,000 less than it is today.
Ben Graboske, Black Knight's president of data and analytics, said that homeowner positions remain strong.
As mortgage rates rose last spring, it became less affordable to buy a home. Since the beginning of the year, the monthly payment on the average home has increased by over $1,000.
In 10% of major markets, homeowners have to spend more than the long-term average amount of household income to make their payments.
Home sales plummeted back in May.
Home prices fell for the third month in a row in September, but the decline wasn't as steep as in July and August. Home prices fell much more steeply than usual this year because of the seasonal slowdown in the market.
Since the end of June, prices have fallen 2.5%, which is the first 3-month drop since late last year and the worst 3-month drop since the financial crisis. The median home price has fallen over the last few months. The prices are still higher than they were a year ago.
Since May, the amount of collective equity available to borrowers has fallen by more than $1 billion. Three years have passed since the first decline in tappable equity.
The percentage of borrowers who owe more on their mortgage than their homes are worth is still low. The numbers are starting to increase.
The number of borrowers who are underwater is double what it was in May. Since they bought at the peak of the market, those who purchased in the past year are most likely to go underwater.
Just 3.6% of nearly 53 million U.S. mortgage holders are either underwater or have less than 10% equity in their homes, according to Graboske.
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