Tuesday, September 15, 2015

CoreLogic: "CoreLogic Reports 759,000 US Properties Regained Equity in the Second Quarter of 2015"

by Bill McBride on 9/15/2015 10:58:00 AM

From CoreLogic: CoreLogic Reports 759,000 US Properties Regained Equity in the Second Quarter of 2015

CoreLogic ... today released a new analysis showing 759,000 properties regained equity in the second quarter of 2015, bringing the total number of mortgaged residential properties with equity at the end of Q2 2015 to approximately 45.9 million, or 91 percent of all mortgaged properties. Nationwide, borrower equity increased year over year by $691 billion in Q2 2015. The total number of mortgaged residential properties with negative equity is now at 4.4 million, or 8.7 percent of all mortgaged properties. This compares to 5.1 million homes, or 10.2 percent, that had negative equity in Q1 2015, a quarter-over-quarter decrease of 1.5 percentage points. Compared with 5.4 million homes, or 10.9 percent, reported for Q2 2014, the number of underwater homes has decreased year over year by 1.1 million, or 19.4 percent.

... Of the more than 50 million residential properties with a mortgage, approximately 9 million, or 17.8 percent, have less than 20 percent equity (referred to as “under-equitied”), and 1.1 million, or 2.3 percent, have less than 5 percent equity (referred to as near-negative equity). Borrowers who are “under-equitied” may have a more difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints. Borrowers with near-negative equity are considered at risk of moving into negative equity if home prices fall. ...
emphasis added
CoreLogic, Negative Equity by StateClick on graph for larger image.

This graph shows the break down of negative equity by state. Note: Data not available for some states. From CoreLogic:

"Nevada had the highest percentage of mortgaged residential properties in negative equity at 20.6 percent, followed by Florida (18.5 percent), Arizona (15.4 percent), Rhode Island (13.8 percent) and Illinois (13.1 percent). Combined, these five states accounted for 31.7 percent of negative equity in the U.S."

Note: The share of negative equity is still very high in Nevada and Florida, but down from a year ago.

CoreLogic, LTVThe second graph shows the distribution of home equity in Q2 2015 compared to Q1 2015. In Q2, 3.3% of residential properties have 25% or more negative equity, down from 3.8% in Q1 2015.

In Q2 2014, there were 5.4 million properties with negative equity - now there are 4.4 million.  A significant change.