CoreLogic: About $741 Billion Of Negative Equity Regained In Q3

Due to rising home prices, about 256,000 U.S. properties regained equity in the third quarter, according to CoreLogic.

The total increase in equity was about $741 billion, according to the firm's data.

The increase brought the total number of mortgaged residential properties with equity at the end of the third quarter to approximately 46.3 million or 92.0% of all homes with a mortgage.

However, about 4.1 million properties, or about 8.1% of all homes with a mortgage, remained in negative equity – or ‘underwater’ – according to the firm's data.

Although the number of underwater homes is still higher than in the pre-crisis years, it is down 4.7% compared with the second quarter, when 4.3 million homes were underwater, and down 20.7% compared with the third quarter of 2014, when 5.2 million homes were underwater.

The national aggregate value of negative equity as of the end of the third quarter was $301 billion – a decrease of 2.6% from approximately $309 billion in the second quarter and a decrease of 11.8% from about $341 billion in the third quarter of 2014.

About 8.9 million properties, or 17.6% of all homes with a mortgage, had less than 20% equity (referred to as ‘under-equitied’) and about 1.1 million, or 2.2%, had less than 5% equity (referred to as near-negative equity).

‘Home price growth continued to lift borrower equity positions and increase the number of borrowers with sufficient equity to participate in the mortgage market,’ says Frank Nothaft, chief economist for CoreLogic, in a statement. ‘In Q3 2015 there were 37.5 million borrowers with at least 20 percent equity, up seven percent from 35 million in Q3 2014. In the last three years, borrowers with at least 20 percent equity have increased by 11 million, a substantial uptick that is driving rapid growth in home equity originations.’Â

‘Homeowner equity is the largest source of wealth for many Americans,’ adds Anand Nallathambi, president and CEO of CoreLogic. ‘The rise in home prices, expected to be at least five percent in 2016, will continue to build wealth and confidence across America. As this process continues, it will provide support for the housing market and the broader economy throughout next year.’

For more, including a breakdown of which states had the highest and lowest number of properties with negative equity for the quarter, click here.


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