CoreLogic: 2.8 Million Residential Properties Still with Negative Equity

CoreLogic, Irvine, Calif., said while U.S. homeowners continue to see their equity rise–by nearly $1 trillion since second-quarter 2016–nearly three million residential properties remain “underwater,” in negative equity.

The company’s quarterly home equity analysis reported the number of underwater homes fell by 750,000 over the past year, a 22 percent decrease. Homeowners with mortgages saw their equity build by nearly 11 percent over the past year, a gain of $766 billion.

Additionally, over the year, homeowners saw an average of $12,987 gain in equity. Western states led the equity increase, with Washington homeowners gaining an average of nearly $40,000 in home equity and California homeowners gaining an average of $30,000 in home equity. Home price increases in these states drove the equity gains.

CoreLogic reported between the first and second quarters, mortgaged residential properties with negative equity decreased by 10 percent to 2.8 million homes, or 5.4 percent of all mortgaged properties. Year over year, negative equity decreased by 21.9 percent from 3.6 million homes, or 7.1 percent of all mortgaged properties.

“Over the last 12 months, approximately 750,000 borrowers achieved positive equity,” said Frank Nothaft, CoreLogic chief economist. “This means that mortgage risk continues to decline and, given the continued strength in home prices, [we] expect home equity to rise steadily over the next year.”

Negative equity peaked at 26 percent of mortgaged residential properties in Q4 2009. The national aggregate value of negative equity was $284.4 billion at the end of the second quarter, an increase of $200 million, or 0.1 percent, from $284.2 billion in the first quarter and down year over year by $700 million, or 0.2 percent, from $285.1 billion.