About 84,000 residential properties regained equity in the first quarter, reducing the total number of properties in negative equity by about 3%, according CoreLogic’s home equity report.
The average homeowner gained $16,300 in home equity in the first quarter – however, it should be noted that home price appreciation varies greatly from market to market.
About 2.5 million residential properties, or about 4.7% of all home with a mortgage, remained in negative equity, as of the first quarter, according to the report.
On average, U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase 13.3% year over year, representing a gain of $1.01 trillion since the first quarter of 2017.
Should home prices increase another 5% in the next 12 months, an additional 500,000 properties would return to an equity position, according to the software, data and analytics firm.
While home equity grew nationwide, the western states experienced the largest increase. Washington homeowners gained an average of approximately $44,000 in home equity, and California homeowners gained an average of approximately $51,000, according to CoreLogic’s data.
Year over year, the number of home in negative equity decreased 21% – from 3.1 million homes – or 6.1% of all mortgaged properties – in the first quarter of 2017.
“Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity the primary driver of home equity wealth creation,” says Frank Nothaft, chief economist for CoreLogic, in a statement. “The CoreLogic Home Price Index grew 6.7 percent during the year ending March 2018, the largest 12-month increase in four years.
“Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years. Washington led all states with 12.8 percent appreciation, and its homeowners also had much larger home-equity gains than the national average,” he adds.
Negative equity peaked at 26% of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.
The national aggregate value of negative equity was approximately $284.8 billion, as of the end of the first quarter. This is up quarter-over-quarter by approximately $100 million, from $284.7 billion in the fourth quarter.
“Home equity balances continue to grow across the nation,” says Frank Martell, president and CEO of CoreLogic. “In the far Western states, equity gains are fueled by a long run in home price escalation. With strong economic growth and higher purchase demand, we expect these trends to continue for the foreseeable future.”
