Nearly 1 million homeowners return to positive equity

by Rachel.Norvell26 Sep 2014
Nearly 1 million homes worth less than the debt on them fell during the second quarter of 2014, bringing the total number of mortgaged houses with equity in the U.S. to more than 44 million, according to the latest CoreLogic Equity Report.

The study also showed U.S. homeowners regained $1 trillion worth of equity in the second quarter, compared to the same period a year ago.  

“With more and more borrowers regaining equity, we expect homeownership to become an increasingly attractive option for many who have remained on the sidelines in the aftermath of the great recession,” said Sam Khater, deputy chief economist for CoreLogic. “This should provide more opportunities for people to sell their homes, purchase a different home or refinance an existing mortgage.”

However, about 5.3 million homes, or 10.7% of all mortgaged residential properties, were still worth less than their mortgages during the second quarter, but that's down from 7.2 million homes, or 14.9%, in the same period a year ago.

The national average value of negative equity was $345.1 billion at the end of the second quarter, down $38.1 billion from approximately $383.2 billion in the first quarter of this year. Overall, the value of negative equity declined from $432.9 billion, representing a 20.3% year-over-year decrease.

Of the 44 million residential properties with positive equity, approximately 9 million have less than 20% equity and 1.3 million of those have less than 5% (near-negative equity). CoreLogic says borrowers with near-negative equity are considered at risk of moving into negative equity if home prices fall.  In contrast, if home prices rose by as little as 5 %, an additional 1 million homeowners now in negative equity would regain equity.   

 

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