CoreLogic: Homeowner Equity Up Nearly $900 Billion in Q3

CoreLogic, Irvine, Calif., said U.S. homeowners with mortgages saw their equity increase by nearly 12 percent year over year in the third quarter, representing a gain of nearly $900 billion.

The company’s third quarter home equity analysis said homeowners with mortgages–representing 63 percent of all homeowners–saw a gain of 11.8 percent, or $871 billion, an average of nearly $15,000. More than 260,000 mortgaged properties regained equity between the second and third quarter, while the number of “underwater” homes decreased more than 700,000 from a year ago.

The report said 2.5 million residential properties with a mortgage remain in negative equity, a decrease of 9 percent from a year ago, representing 4.9 percent of all mortgaged properties. Year over year, negative equity decreased 22 percent from 3.2 million homes, or 6.3 percent of all mortgaged properties.

Western states led the increase in equity gains, while no state experienced a decrease. Washington homeowners gaining an average of $40,000 in home equity and California homeowners gaining an average of $37,000 in home equity.

“This increase is primarily a reflection of rising home prices, which drives up home values, leading to an increase in home equity positions and supporting consumer spending,” said Frank Nothaft, chief economist for CoreLogic.

CoreLogic said negative equity peaked at 26 percent of mortgaged residential properties in Q4 2009. The national aggregate value of negative equity was $275.7 billion at the end of the third quarter, down by $9.1 billion, or 3.2 percent, from $284.8 billion in the second quarter and by $9.5 billion, or 3.3 percent, from $285.2 billion a year ago.

“While homeowner equity is rising nationally, there are wide disparities by geography,” said Frank Martell, president and CEO of CoreLogic. “Hot markets like San Francisco, Seattle and Denver boast very high levels of increased home equity. However, some markets are lagging behind due to weaker economies or lingering effects from the great recession. These include large markets such as Miami, Las Vegas and Chicago, but also many small- and medium-sized markets such as Scranton, Pa. and Akron, Ohio.”