Homeowners are regaining lost equity at a rapid pace as home values are increasing in many parts of the nation.

CoreLogic reported today that approximately 548,000 homeowners regained equity in Q2 2016 to 92.9% of all mortgaged properties, or about 47.2 million homes. Home equity was up by $646 billion from last year which was 9.9% higher in Q2 2016 compared with Q2 2015.

Texas had the highest percentage of homes with positive equity at 98.3 percent, followed by Alaska (98%), Colorado (97.8%), Hawaii (97.7%) and Utah (97.6%).

However, there are still 3.6 million properties or 7.1% of the homes in the U.S. currently with negative equity. These properties are also known to be underwater or upside down which means that the homeowners owe more on their mortgage than their homes are worth.

Nevada had the most underwater homes at 15.3% followed by Florida (14%), Maryland (11.8%), Illinois (11.7%) and Arizona (11.6%). These top five states combined accounted for 33.7 percent of negative equity in the U.S., but only 18.6 percent of outstanding mortgages.

The good news is that these numbers are down by 13.2% from last quarter when there were 4.2 million homes underwater and a decrease of 19% for this time period last year from 4.5 million homes.

Dr. Frank Nothaft, chief economist for CoreLogic had issued this statement along with the report;

“Home-value gains have played a large part in restoring home equity. The CoreLogic Home Price Index for the U.S. recorded 5.2 percent growth in the year through June, an important reason that the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier.”

President and CEO of CoreLogic, Anand Nallathambi said;

“We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price IndeX. Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity.”

Here are some of the important highlights of the CoreLogic Q2 2016 report:

Of the 10 largest metropolitan areas by population, Miami-Miami Beach-Kendall, FL had the highest percentage of mortgaged properties in negative equity at 18.4 percent, followed by Las Vegas-Henderson-Paradise, NV (17.6 percent), Chicago-Naperville-Arlington Heights, IL (13.4 percent), Washington-Arlington-Alexandria, DC-VA-MD-WV (9.9 percent) and New York-Jersey City-White Plains, NY-NJ (5.9 percent).

Of the same 10 largest metropolitan areas, San Francisco-Redwood City-South San Francisco, CA had the highest percentage of mortgaged properties in a positive equity position at 99.4 percent, followed by Denver-Aurora-Lakewood, CO (98.5 percent), Houston-The Woodlands-Sugar Land, TX (98.4 percent), Los Angeles-Long Beach-Glendale, CA (96.7 percent) and Boston, MA (95 percent).

Of the total $284 billion in negative equity, first liens without home equity loans accounted for $159 billion aggregate negative equity, while first liens with home equity loans accounted for $125 billion.

Among underwater borrowers, approximately 2.2 million hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $252,000, and the average underwater amount is $73,000.

Approximately 1.4 million of all underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $314,000, and the average underwater amount is $88,000.

Erik Sandstrom
LoanSafe's Mortgage Expert

I’m a Senior Loan Officer and LoanSafe mortgage expert. If you need a live rate quote, or need help getting a new mortgage, please call me direct anytime at 619-379-8999.