equity increased by another 11.2 percent over the four quarters that ended with
the first quarter of 2016. CoreLogic’s
home equity analysis for the Quarter One, shows that the 63 percent of the
country’s homeowners who carry a mortgage gained $766.4 billion in equity over
that period, an average of $13,400 each. Washington
had the highest year-over-year average increase at $37,900, while Alaska
experienced a small decline.
At the end
of the first quarter of 2017, 3.1 million homes remained underwater, representing
6.1 percent of mortgaged homes. This was
3 percent fewer than in the fourth quarter of 2016. On an annual basis,
properties with negative equity declined by 24 percent from 4.1 million, a national
rate of 8.1 percent.
Negative equity, often referred to
as being “underwater” or “upside down,” applies to
borrowers who owe more on their mortgages than their homes are worth. Negative
equity can occur because of a decline in home value, an increase in mortgage
debt or both. CoreLogic, which has tracked negative equity since the third
quarter of 2009 says that its incidence peaked at 26 percent of mortgaged
properties in Q4 of that year.
“One million borrowers achieved
positive equity over the last year, which means mortgage risk continues to steadily
decline as a result of increasing home prices,” said Dr. Frank Nothaft,
chief economist for CoreLogic. “Pockets of concern remain with markets
such as Miami, Las Vegas and Chicago, which are the top three for negative
equity among large metros, with each recording a negative equity share at least
twice or more the national average.”
The national aggregate value of
negative equity was approximately $283 billion at the end of Q1 2017, down
quarter over quarter by approximately $2.6 billion, or 0.9 percent, from $285.5
billion in Q4 2016 and down year over year by approximately $21.5 billion, or
7.1 percent, from $304.5 billion in Q1 2016.
“Homeowner equity increased by
over $750 billion during the last year, the largest increase since
mid-2014,” said Frank Martell, president and CEO of CoreLogic. “The
rising cushion of home equity is one of the main drivers of improved mortgage
performance. It also supports consumer balance sheets, spending and the broader
The highest percentage of homes with
positive equity in the first quarter was in Texas at 98.4 percent. It was
followed by Utah (98.2 percent), Washington (98.2 percent), Hawaii (98.1
percent) and Colorado (98 percent).
Nevada had the highest percentage of
homes with negative equity at 12.4 percent, followed by Florida (11.1 percent),
Illinois (10.5 percent), New Jersey (10.2 percent) and Connecticut (9.9
percent). These top five states combined account for 32.6 percent of
outstanding mortgages in the U.S.