National tappable equity levels hit a tenth consecutive record high in the second quarter, but signs of decline apparent in some of the most equity-rich markets point to a possible inflection point, according to a new report by Black Knight.

Tappable equity – the amount available for homeowners to access while retaining at least 20% equity in their homes –  rose to $11.5T, up $500B (+5%) from Q1 and $2.3T (+25%) from the same time last year, Black Knight said.

Equity growth slowed as home price appreciation began to moderate, with 11 of the nation’s 50 most equity-rich markets posting declines in Q2, the data showed. All 11 are in the western U.S., including eight in California. In total, California, which leads the nation with $3.5T (30.5%) of all tappable equity, saw a decline of $155B (4.2%) in Q2, according to the report.

Four of the five most equity-rich markets, all on the West Coast, saw equity decline in Q2:

  • San Jose, Calif., experienced the strongest decline, with tappable equity falling by $55B (-12%).
  • Seattle’s tappable equity fell by $38B (-10%)
  • San Francisco was down $42B (-5%)
  • Los Angeles fell $36B (-3%)
  • San Diego, which ranks seventh in tappable equity, also experienced a 5% decline at a $15.9B loss

At the end of Q2, the average U.S. homeowner had $216,900 in tappable equity, up $9.7K (5%) in the quarter and $43.4K (25%) from the same time last year. Meanwhile, total market leverage for U.S. borrowers dropped below 42% for the first time since Black Knight began tracking the metric in 2004, according to the report.

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