Thursday, March 10, 2016

CoreLogic: "1 Million US Borrowers Regained Equity in 2015"

by Bill McBride on 3/10/2016 09:58:00 AM

From CoreLogic: CoreLogic Reports 1 Million US Borrowers Regained Equity in 2015

CoreLogic ... today released a new analysis showing 1 million borrowers regained equity in 2015, bringing the total number of mortgaged residential properties with equity at the end of Q4 2015 to approximately 46.3 million, or 91.5 percent of all mortgaged properties. Nationwide, borrower equity increased year over year by $682 billion in Q4 2015. The CoreLogic analysis also indicates approximately 120,000 properties lost equity in the fourth quarter of 2015 compared to the third quarter of 2015.

The total number of mortgaged residential properties with negative equity stood at 4.3 million, or 8.5 percent, in Q4 2015. This is an increase of 2.9 percent quarter over quarter from 4.2 million homes, or 8.3 percent, in Q3 2015 and a decrease of 19.1 percent year over year from 5.3 million homes, or 10.7 percent, compared with Q4 2014. ...

For the homes in negative equity status, the national aggregate value of negative equity was $311 billion at the end of Q4 2015, increasing approximately $5.5 billion, or 1.8 percent, from $305.5 billion in Q3 2015. On a year-over-year basis, the value of negative equity declined overall from $348 billion in Q4 2014, representing a decrease of 10.7 percent in 12 months.
...
“In Q4 of last year home equity increased by $680 billion or 11.5 percent, the 13th consecutive quarter of double digit growth," said Frank Nothaft, chief economist for CoreLogic. “The improvement in equity reflects positive home prices and continued deleveraging of mortgage balances by households.”
emphasis added
On states:
Nevada had the highest percentage of mortgaged residential properties in negative equity at 18.7 percent, followed by Florida (17.1 percent), Illinois (14.6 percent), Arizona (14 percent), and Rhode Island (13.5 percent). These top five states combined account for 30.8 percent of negative equity in the U.S., but only 16.5 percent of outstanding mortgages.
Note: The share of negative equity is still very high in Nevada and Florida, but down from a year ago.

CoreLogic, LTVClick on graph for larger image.

This graph shows the distribution of home equity in Q4 2015 compared to Q3 2015. In Q4, approximately 3.0% of residential properties had 25% or more negative equity.

For reference, three years ago, in Q3 2012, 9.6% of residential properties had 25% or more negative equity.