U.S. homeowners have lost the following amount of equity since May.

After home prices increased by 45% since the start of the pandemic, homeowner equity reached a peak of $11.7 trillion in May of last year.

For the third consecutive month, home prices declined on a month-to-month basis in September.

The median home price has decreased by $11,560 since July.

Homeowners now have record levels of new home equity thanks to the pandemic’s first two years’ historic home price rise.

Black Knight, a provider of mortgage software and analytics, estimates that since May, about $1.5 trillion of that total has disappeared. The equity of a typical borrower has decreased by $30,000.

After home prices increased 45% since the start of the pandemic, homeowner equity reached a peak of $17.6 trillion in May of last year.

Prices were still up 41% at the end of September, and equity was still in good shape. Individually, homeowners who purchased their homes prior to the pandemic have $5 trillion more in assets than they did before the pandemic struck. Accordingly, each borrower will have $92,000 more equity than they did in February 2020.

According to Ben Graboske, president of data and analytics at Black Knight, “additional declines may be on the horizon, but homeowner positions remain generally strong.”

However, as mortgage rates increased in the spring, home prices started to decline, making it much more expensive to purchase. With a 20% down payment and a mortgage, the average monthly payment has increased by almost $1,000 since the year’s beginning.

Homeowners in 10% of large markets, including Las Vegas, Miami, Los Angeles, Phoenix, Tampa, and San Diego, must spend twice the median household income per month to cover their mortgage payments.

That is why prices have been rising while home sales have been falling sharply since May.

For the third consecutive month, home prices decreased on a month-to-month basis in September, though the drop wasn’t as significant as in July and August. Due to the seasonal slowdown, prices typically decline from summer to fall, but in 2022 they did so much more abruptly.

Prices have dropped 2.6% since the end of June, which is the steepest three-month drop since the financial crisis of early 2009 and the first one since late 2018. The median home price has decreased by $11,560 since July. The cost of goods is still 10.7% higher now than it was in September 2021.

The total equity that borrowers could access as of the end of September while still owning 20% of their homes had decreased by $1.17 trillion since May. That represents the first decrease in ‘tappable equity in three years.

Only 0.85% of borrowers have mortgage debt that exceeds the value of their homes, which is still a very low percentage. However, the figures are starting to increase.

Currently, fewer than 500,000 borrowers have mortgages that are underwater, but that number is still double what it was in May. The risk of going underwater is greatest for people who bought their homes within the last year because they did so at the height of the market.

To put the situation in perspective, only 3.6% of the nearly 53 million Americans with mortgages are underwater or have less than 10% equity in their homes, which is about half the share prior to the pandemic, according to Graboske.