About 2.2 million properties, or 4.3% of all properties with a mortgage, were in negative equity in the second quarter – and while that might sound bad, it’s a decrease of 9% compared with the first quarter and a decrease of 20.1% compared with the second quarter of 2017, according to CoreLogic’s Home Equity Report.
Driving the improvement, of course, are rising home prices.
Cumulatively, U.S. homeowners with mortgages have seen their equity increase by 12.3% percent year over year, representing a gain of nearly $981 billion since the second quarter of 2017. About 221,000 residential properties have regained equity in the past year.
The average homeowner gained $16,200 in home equity between the second quarter of 2017 and the second quarter of 2018, according to CoreLogic’s data.
While home equity grew in almost every state in the nation, the western states experienced the most significant increases.
California homeowners gained an average of approximately $48,800 in home equity, while Washington homeowners experienced an average increase of approximately $41,100.
Frank Nothaft, chief economist for CoreLogic, says the average gain of $16,200, when aggregated across all homeowners, “totals almost $1 trillion in gains in home equity wealth.”
“This wealth gain will support additional consumption spending and home improvement expenditures in coming years,” Nothaft says in a statement.
The national aggregate value of negative equity was approximately $279.8 billion at the end of the second quarter – down from $285.3 billion in the first quarter.
“Negative equity levels continue to drop across the US with the biggest declines in areas with strong price appreciation,” says Frank Martell, president and CEO of CoreLogic. “Further, the relatively low level of shadow inventory contributes to the chronic shortage of housing supply and price increases in many markets.”