Changes in homeowner equity in 2023: fluctuations in homeownership in U.S. states.

New real estate market data shows sellers are taking more losses and sales are declining. For the millions of Americans who own their homes, their real estate is usually their largest source of wealth. Is that good news? Thanks to rising home prices, their assets have increased in value over the past year. The typical U.S. homeowner saw their home equity increase by $20,000, or 6.8%, by the end of the third quarter compared to a year earlier, according to a new analysis by real estateagency CoreLogic.

Despite a stiff countervailing factor in the form of the highest mortgage rates in two decades, median home prices have risen about 9% this year, according to the National Association of Realtors. This has led to an increase in the value of the homeowners' real estate interest, or the difference between the value of the home and the remaining mortgage amount.

Accumulating a share of real estate is key to wealth accumulation because it allows the owner to leverage the value of their home, such as through a property-based loan.

"The growth in home equity is driven by rising home prices, and so we've had a lot of gains in that area this year given all the other developments in the real estate market," CoreLogic Chief Economist Selma Hepp told CBS MoneyWatch.

"When people have more equity in their homes, they feel richer," she added.

Accumulating a stake in real estate also provides protection in the event of financial emergencies and gives owners another source of assets to rely on when significant expenses arise, such as paying for college or home repairs.

While the typical homeowner in most U.S. states saw their home equity rise this year, property owners in some parts of the country were losing ground, according to CoreLogic.

Property owners in Texas lost an average of about $9,000 in equity in their home compared to a year earlier, the study found.

The reason, Hepp said, is due in part to instability in the Austin real estate market, which experienced huge price increases during the pandemic. Despite the decline, homeowners in Texas still have a significant share of their real estate holdings at an average of $217,000 each, CoreLogic noted.

Two other states experienced declines in real estate share over the past year: New York (where share declined by an average of $7,525) and Utah (an $873 loss). Still, property owners in the two states have an average share of $364,000 and $348,000, respectively.

"Home price appreciation matters, and it affects changes in home prices," Hepp noted. "In Texas, we've seen a decline in home prices, especially this year. "

Meanwhile, property owners in Hawaii, California and Massachusetts - among the most expensive states for residential real estate - saw the biggest increases in 2023.

These are also the states where property owners already have one of the highest stakes in their homes. For example, the typical homeowner in Hawaii has about $717,000 in equity, while California residents have an average equity stake of about $634,000, CoreLogic reported.

Homeownership can be a path to greater wealth, according to a report from the Federal Reserve, which notes that 66% of Americans who own property saw their stake grow from $139,100 in 2019 to $201,000 in 2022.