Thursday, September 21, 2017

CoreLogic: "2.8 million Homes still in negative equity" at end of Q2 2017

by Bill McBride on 9/21/2017 08:46:00 AM

From CoreLogic: CoreLogic Reports 2.8 Million Residential Properties with a Mortgage Still in Negative Equity

CoreLogic® ... today released its Q2 2017 home equity analysis which shows U.S. homeowners with mortgages (roughly 63 percent of all homeowners) have seen their equity increase by a total of 10.6 percent year over year, representing a gain of $766 billion since Q2 2016.

Additionally, homeowners gained an average of $12,987 in equity between Q2 2016 and Q2 2017. Western states led the equity increase with Washington homeowners gaining an average of approximately $40,000 in home equity and California homeowners gaining an average of approximately $30,000 in home equity. Home price increases in these states drove the equity gains.

From Q1 2017 to Q2 2017, the total number of mortgaged residential properties with negative equity decreased 10 percent to 2.8 million homes, or 5.4 percent of all mortgaged properties. Year over year, negative equity decreased 21.9 percent from 3.6 million homes, or 7.1 percent of all mortgaged properties, from Q2 2016 to Q2 2017.

Over the last 12 months, approximately 750,000 borrowers achieved positive equity,” said Dr. Frank Nothaft, chief economist for CoreLogic. “This means that mortgage risk continues to decline and, given the continued strength in home prices, CoreLogic expects home equity to rise steadily over the next year.”
emphasis added
CoreLogic, LTVClick on graph for larger image.

This graph shows the distribution of home equity in Q2 2017 compared to Q1 2017.

For reference, about five years ago, in Q3 2012, almost 10% of residential properties had 25% or more negative equity.

A year ago, in Q2 2016, there were 3.6 million properties with negative equity - now there are 2.8 million.  A significant change.