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Thursday, December 12, 2019

CoreLogic: 2 Million Homes with Negative Equity in Q3 2019

by Calculated Risk on 12/12/2019 10:03:00 AM

From CoreLogic: CoreLogic Reports 78,000 Single-Family Properties Regained Equity in the Third Quarter of 2019

CoreLogic® ... today released the Home Equity Report for the third quarter of 2019. The report shows that U.S. homeowners with mortgages (which account for roughly 64% of all properties) have seen their equity increase by 5.1% year over year, representing a gain of nearly $457 billion since the third quarter of 2018.
From the second quarter of 2019 to the third quarter of 2019, the total number of mortgaged homes in negative equity decreased by 4% to 2 million homes or 3.7% of all mortgaged properties. The number of mortgaged properties in negative equity during the third quarter of 2019 fell by 10%, or 220,000 homes, compared to the third quarter of 2018, when 2.2 million homes, or 4.1% of all mortgaged properties, were in negative equity.
“Ten years ago, during the depths of the Great Recession, more than 11 million homeowners had negative equity or 25% of mortgaged homes,” said Dr. Frank Nothaft, chief economist for CoreLogic. “After more than eight years of rising home prices and employment growth, underwater owners have been slashed to just 2 million, or less than 4% of mortgaged homes.”

Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in a home’s value, an increase in mortgage debt or both. Negative equity peaked at 26% of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis, which began in the third quarter of 2009.
emphasis added
Click on graph for larger image.

This graph from CoreLogic compares Q3 to Q2 equity distribution by LTV. There are still quite a few properties with LTV over 125%.

On a year-over-year basis, the number of homeowners with negative equity has declined from 2.2 million to 2.0 million.