47.2M Homes Nationwide Now Have Equity
DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 16, 2016
Home owners are picking up more equity again. About 548,000 home owners regained equity in the second quarter, which bumped up the percentage of homes with positive equity to 92.9 percent, according to CoreLogic’s latest equity report.
Read more: Where to Find the Equity-Rich
Home equity has grown year-over-year by $646 billion, a 9.9 percent increase compared to the second quarter of 2015. The states with the highest percentage of homes with positive equity include Texas (at 98.3%); Alaska (98%); Colorado (97.8%); Hawaii (97.7%); and Utah (97.6%).
“Home value gains have played a large part in restoring home equity,” says Frank Nothaft, CoreLogic’s chief economist.
Home prices will likely rise another 5 percent in the coming year, which could lift an additional 700,000 home owners into equity territory, says Anand Nallathambi, president and CEO of CoreLogic.
Home owners would cement their equity position further with those additional price rises. About 8.6 million – or 17 percent – of homes with a mortgage have less than 20 percent of equity, which is referred to as “under-equitied.” About 1.9 percent of properties with a mortgage – or 965,000 – have less than 5 percent equity, considered “near-negative equity.”
“Borrowers who are under-equitied may have a difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints,” according to CoreLogic’s report. “Borrowers with near-negative equity are considered at risk of shifting into negative equity if home prices fall.”
About 3.6 million properties – or 7.1 percent of all homes with a mortgage -- as of the second quarter remained in a negative equity position, meaning that borrowers’ mortgages are higher than what their home is currently valued at. The percentage of homes in negative equity has dropped by 13.2 percent when compared to the first quarter and by 19 percent year-over-year.
The states with the highest percentage of properties with negative equity are: Nevada (15.3%); Florida (14%); Maryland (11.8%); Illinois (11.7%); and Arizona (11.6%), according to CoreLogic’s report.