Homeowners now have less equity than a year ago, the first annual decline in a decade

• The average US homeowner with a mortgage has less home equity now than 12 months ago.
• Equity per borrower slipped 1.9% from the same time last year, CoreLogic data shows.

The average US homeowner saw their home equity decline year over year for the first time since the first quarter of 2012, in the aftermath of the housing crisis and Great Recession.

Out of the 63% of US homes with a mortgage, average homeowner equity — the current property value minus what's still owed on the mortgage — declined 1.9% in the first quarter from the same time last year to $274,070, according to CoreLogic data cited by the Associated Press.

In total, homeowners with a mortgage cumulatively lost $108.4 billion in home equity since the first quarter of 2022, about a 0.7% drop.

Home equity typically falls when prices drop. While home prices remain well above pre-pandemic levels, they have slipped recently.

On Thursday, the National Association of Realtors said prices for existing homes fell in 3.1% May, the largest annual decline in since late 2011.

Over the last year, high mortgage rates and tight inventory have slowed down the housing market, with sales of previously occupied homes down 23.2% in the year up to April, data from the National Association of Realtors shows.

And since it's more affordable to stay put with cheaper borrowing costs instead of taking on a more expensive mortgage rate and moving, current homeowners are in "golden handcuffs."

"For new home buyers, this is the worst situation since the end of the Great Recession," Edward Seiler, the Mortgage Banker's Association's associate vice president for housing economics, told Insider previously. "Current homeowners that were lucky enough to get a 2.75% interest rate in 2022 are in a great position, but for new home buyers looking to buy a first home, or those looking to move to another home, it's a very daunting proposition."